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High materiality8/10

Gap lowers 2025 sales outlook after Old Navy miss, stock plunges

May 28, 2026, 4:46 PM EDT4 sourcesAI-analyzed
Why it may matterVerify against the original reporting

Miss on Old Navy; guidance cut; sharp after-hours decline signal renewed downside risk and valuation re-rating until a clearer turnaround path emerges.

AI summary

What happened, with direct paths to the underlying reporting

Gap reported softer-than-expected results driven by Old Navy, prompting a cut to company-wide sales growth guidance to 1-2%. While adjusted EPS rose to 2.30-2.40 due to tax and tariff benefits, top-line misses pressured shares, which dropped over 10% after hours. The quarterly mix showed a strong Gap banner (+10% comps) but weak Athleta (-11%), signaling uneven brand performance and a need for better assortments and promotions.

  • Old Navy comp +1% vs 3% expected; company trims full-year sales guidance to 1-2%.
  • Q1 revenue $3.50B; adjusted EPS 38c, vs 37c expected; stock falls >10% after hours.
  • Gap banner comps +10%; Athleta comps -11%; Banana Republic comps +2%; mix remains uneven.
  • Donald Kohler named Banana Republic CEO; strategic leadership shift could influence turnaround.

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StockNews.AI groups source reporting, classifies the event, and measures subsequent price movement. This is informational research, not investment advice. Prices may be delayed or unavailable.

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