Gap Earnings: Namesake Brand Shines but Old Navy Weakness a Mild Concern; Shares Undervalued
With comparable sales growth of 1% at Old Navy (57% of sales) and 10% at its namesake (23%), Gap had 2% comparable sales growth in 2026's first quarter. Gap's gross and adjusted operating margins declined 130 and 230 basis points, respectively, to 40.5% and 5.2% on tariffs and planned investments.