Gap Beats Q2 Earnings, Raises Full-Year Guidance

Gap Inc reported better-than-expected second-quarter earnings on Thursday and raised its fiscal 2026 EPS guidance above market expectations.

Revenue came in at $3.65 billion, slightly below the expected $3.69 billion. Adjusted EPS was 52 cents, beating the expected 48 cents.

Gap forecast third-quarter revenue of approximately $3.96 billion to $4.0 billion, versus expectations of $3.98 billion. The company also provided full-year revenue guidance of $15.55 billion to $15.63 billion, compared to expectations of $15.53 billion.

Gap raised its full-year adjusted EPS guidance to a new range of $2.35 to $2.45, up from the previous range of $2.30 to $2.40, versus expectations of $2.34.

Gap President and CEO Richard Dickson said: "While second-quarter revenue came in slightly below expectations, sustained operational and financial discipline drove strong gross margin performance, resulting in earnings exceeding expectations."

Gap shares surged 14.3% on Friday to close at $23.76.

Following the earnings release, several analysts revised their price targets on Gap.

BTIG analyst Robert Drbul maintained a Buy rating on the stock and raised the price target from $26 to $27.

BofA Securities analyst Lorraine Hutchinson maintained a Neutral rating and raised the price target from $26 to $27.

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