GAP (NYSE:GAP) Announces Quarterly Earnings Results, Misses Expectations By $0.01 EPS

GAP (NYSE:GAP) announced its quarterly earnings data on Thursday. The company reported $0.45 EPS for the quarter, missing the consensus estimate of $0.46 by ($0.01), FiscalAI reports. The business had revenue of $4.24 billion during the quarter, compared to the consensus estimate of $4.24 billion. GAP had a net margin of 5.31% and a return on equity of 22.98%. The business’s revenue was up 2.1% compared to the same quarter last year. During the same period last year, the company earned $0.54 EPS. GAP updated its FY 2026 guidance to 2.200-2.350 EPS.

Here are the key takeaways from GAP’s conference call:

• Gap Inc. reported a strong quarter and year with Q4 comps +3%, full-year net sales +2%, one of its highest gross margins in 25 years, $1.1 billion operating income, and a cash balance of $3.0 billion.
• The board increased the quarterly dividend (~6%) and authorized a new $1 billion share repurchase program, building on $247M of dividends and $155M of buybacks in 2025.
• Core-brand momentum continues: Old Navy, Gap, and Banana Republic delivered consecutive periods of positive comps (Old Navy and Gap showing category share gains), and the company is seeding growth accelerators—beauty, accessories, a reworked loyalty program (Encore), Fashiontainment and AI/technology investments—to expand revenue and engagement over time.
• Athleta remains a clear underperformer with Q4 sales down ~11% (comps down ~10%) and the company expects mid- to high-single-digit sales declines in the first half of 2026 while it rebuilds the brand.
• Tariffs materially pressured margins (about a 200 bp headwind in Q4 and ~120 bp for the year); management expects a Q1 gross margin headwind of ~150–200 bps with improvement later in 2026 as sourcing strategies annualize, creating near-term margin cadence risk.

GAP Stock Up 1.8%

NYSE:GAP traded up $0.41 during trading hours on Tuesday, hitting $23.26. 2,148,033 shares of the company’s stock traded hands, compared to its average volume of 7,719,329. The firm has a market cap of $8.65 billion, a P/E ratio of 10.83, a P/E/G ratio of 2.43 and a beta of 2.29. GAP has a twelve month low of $16.99 and a twelve month high of $29.36. The company has a debt-to-equity ratio of 0.39, a quick ratio of 1.08 and a current ratio of 1.75. The stock’s fifty day moving average price is $27.21 and its two-hundred day moving average price is $24.99.

GAP Increases Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Wednesday, April 29th. Shareholders of record on Wednesday, April 8th will be issued a dividend of $0.175 per share. This represents a $0.70 annualized dividend and a yield of 3.0%. The ex-dividend date is Wednesday, April 8th. This is a boost from GAP’s previous quarterly dividend of $0.17. GAP’s dividend payout ratio is presently 30.70%.

Insider Buying and Selling

In other news, Director William Sydney Fisher sold 11,140 shares of the firm’s stock in a transaction on Friday, December 12th. The shares were sold at an average price of $26.81, for a total transaction of $298,663.40. Following the transaction, the director owned 2,753,453 shares in the company, valued at approximately $73,820,074.93. This trade represents a 0.40% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, insider Julie Gruber sold 30,000 shares of the company’s stock in a transaction on Wednesday, December 17th. The stock was sold at an average price of $28.00, for a total transaction of $840,000.00. Following the sale, the insider directly owned 37,395 shares of the company’s stock, valued at approximately $1,047,060. This represents a 44.51% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last ninety days, insiders sold 133,971 shares of company stock worth $3,629,264. Corporate insiders own 31.00% of the company’s stock.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently made changes to their positions in the stock. Public Employees Retirement System of Ohio raised its holdings in shares of GAP by 0.6% in the 3rd quarter. Public Employees Retirement System of Ohio now owns 71,867 shares of the company’s stock valued at $1,537,000 after purchasing an additional 447 shares during the period. California State Teachers Retirement System raised its position in shares of GAP by 0.8% in the second quarter. California State Teachers Retirement System now owns 226,506 shares of the company’s stock valued at $4,940,000 after buying an additional 1,703 shares in the last quarter. EverSource Wealth Advisors LLC raised its holdings in GAP by 177.0% in the 2nd quarter. EverSource Wealth Advisors LLC now owns 7,016 shares of the company’s stock valued at $153,000 after acquiring an additional 4,483 shares in the last quarter. Russell Investments Group Ltd. grew its stake in GAP by 16.8% during the third quarter. Russell Investments Group Ltd. now owns 37,093 shares of the company’s stock worth $793,000 after buying an additional 5,326 shares in the last quarter. Finally, Atlas Capital Advisors Inc. bought a new position in GAP in the fourth quarter valued at approximately $203,000. 58.81% of the stock is owned by institutional investors.

Wall Street Analysts Forecast Growth

Several research analysts recently weighed in on the stock. Jefferies Financial Group upgraded shares of GAP from a “hold” rating to a “buy” rating and upped their price target for the stock from $22.00 to $30.00 in a research report on Friday, November 14th. Bank of America increased their price target on shares of GAP from $23.00 to $27.00 and gave the company a “neutral” rating in a research note on Friday, November 21st. JPMorgan Chase & Co. cut their price target on GAP from $36.00 to $33.00 and set an “overweight” rating for the company in a research note on Friday. Robert W. Baird set a $33.00 price objective on shares of GAP and gave the company an “outperform” rating in a research note on Wednesday, December 17th. Finally, Evercore upped their price objective on shares of GAP from $25.00 to $28.00 and gave the company an “outperform” rating in a research note on Friday, November 21st. Two equities research analysts have rated the stock with a Strong Buy rating, eleven have given a Buy rating and four have assigned a Hold rating to the stock. According to MarketBeat, GAP presently has a consensus rating of “Moderate Buy” and a consensus target price of $30.46.

GAP Company Profile

Gap Inc is a global specialty retailer renowned for its portfolio of apparel and accessories brands, including Gap, Banana Republic, Old Navy and Athleta. The company designs, sources and markets clothing across a broad price range and style spectrum, catering to men, women and children. Its offerings extend from everyday wardrobe essentials such as denim, tees and outerwear to performance and lifestyle pieces, reflecting each brand’s distinct identity and price point.

Founded in San Francisco in 1969 by Donald and Doris Fisher, Gap Inc has grown into one of the world’s largest apparel companies.