Gap raises full-year earnings outlook on solid first quarter

Gap Inc. on Thursday raised its full-year earnings outlook, as the American apparel giant said sales inched forward 1% to $3.5 billion for the first quarter.

The San Francisco-based company reported a 2% uptick in comparable sales for the three months ending May 2, with store sales up 3%, and online sales declining 2%.

By brand, Old Nay comp sales were up 1% to $2 billion, while Gap was the star performer, up 10% to $796 million on a comparable basis. Banana Republic comp sales rose 2%, while activewear brand Athleta continued to prove problematic, with comp sales down 11%.

The company logged quarterly net income of $339 million and diluted earnings per share of $0.90 for the opening quarter of fiscal 2026.

“In the first quarter, Gap Inc. delivered continued progress against our strategic priorities, including further market share gains and achieving our ninth consecutive quarter of positive comparable sales,” said president and chief executive officer, Richard Dickson.

“Gap brand delivered a standout quarter with a double-digit comp, marking one of the brand’s strongest performances in over two decades. Performance across our other brands was varied, reflecting both the different stages of their transformation and some brand-specific dynamics.” 

Looking ahead, the company raised its full-year earnings guidance  to approximately $2.83 to $2.93 diluted earnings per share.

Annual sales are expected to increased between 1% to 2% per year.

Earlier this year, ​Gap and Victoria Beckham launched a collaborative capsule collection, the first step in a “multi-season collaboration rooted in timeless design,” the companies said at the time of reporting in April.