Gap $GAP falls 14% as Q1 sales miss and FY2026 revenue guide narrows

14% was the stock move after Gap $GAP reported Q1 net sales of $3.5B and narrowed fiscal 2026 net sales growth to 1%-2%. The company raised EPS guidance, but the market reaction centered on a revenue miss and weaker Old Navy execution.

Gap's Q1 release put adjusted diluted EPS at $0.38, adjusted net income at $145M, and gross margin at 40.5%. CNBC reported that the shares fell 14% after the retailer cut sales guidance following disappointing Old Navy performance.

Metric | Reported figure
Q1 net sales | $3.5B, +1% YoY
Comparable sales | +2%
Adjusted diluted EPS | $0.38
FY2026 net sales guide | +1% to +2%

The split matters for retail investors because cost control and tariff relief can support EPS while weaker traffic or assortment misses limit revenue growth. Athleta posted Q1 net sales of $270M, down 12%, and comparable sales down 11%, keeping brand recovery on the watch list. The next datapoint is Q2 guidance, especially Old Navy comps and whether gross-margin relief offsets softer demand.

Not investment advice. Verify all figures with primary sources before acting.