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EPS beat contrasts with a revenue miss and a lowered FY26 outlook, triggering a sizable after-hours selloff and potential multiple compression as investors reassess margin and growth trajectory.
What happened, with direct paths to the underlying reporting
Gap reported Q1 earnings per share of $0.90, topping expectations, while revenue reached $3.50 billion, just under the consensus. The company narrowed its FY2026 revenue guidance to a $15.52–$15.67 billion range, below the $15.74 billion analyst view, triggering a sharp after-hours decline around 14% to $21.54. The result suggests improving store momentum and market-share gains, but confirms top-line headwinds that could pressure margins and valuation near term.
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