Gap Sales Miss as Old Navy and Athleta Disappoint Despite Strong Namesake Brand Growth

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3.6.2026

Quick Facts

Gap’s Q4 revenue of $4.2 billion missed analyst estimates of $4.24 billion, sending stock down 9% in after-hours trading
Old Navy comparable sales rose just 3% versus analyst expectations of 4.3%, while Athleta sales fell 11%
Gap’s namesake brand performed strongly with 8% sales growth and 7% comparable sales increase, beating expectations

Gap Inc. reported disappointing fourth-quarter results as weakness at Old Navy and Athleta overshadowed strong performance from its namesake brand and Banana Republic.

The retailer posted Q4 revenue of $4.2 billion, falling short of analyst expectations of $4.24 billion. Gap’s stock dropped 9% in extended trading following the earnings announcement.

Old Navy, Gap’s largest brand, generated $2.3 billion in net sales with comparable sales rising 3%. The growth fell well below analyst consensus of 4.3%, marking a slowdown for the value retailer.

Athleta delivered the most concerning results, with net sales declining 11% to $354 million and comparable sales down 10%. The athleisure brand has struggled to regain momentum despite the broader activewear category’s growth.

Gap’s namesake brand provided a bright spot, with sales jumping 8% to $1.1 billion and comparable sales up 7%. The performance far exceeded analyst expectations of 4.6% comparable sales growth.

Banana Republic continued its recovery with sales rising 1% to $549 million and comparable sales up 4%, marking the brand’s third consecutive quarter of positive comparable sales growth.

CEO Richard Dickson acknowledged Athleta’s challenges while expressing confidence in the turnaround strategy. “Athleta sales trends have been disappointing,” Dickson said in an interview. The company appointed Nike veteran Maggie Gauger as Athleta’s new CEO in August 2025.

External factors weighed on Gap’s performance. Tariffs reduced gross margins by 200 basis points in the quarter, bringing gross margin to 38.1%. Historic winter storms also disrupted operations, forcing about 800 temporary store closures at the storms’ peak in January.

Despite the quarterly miss, Gap maintained its market position gains. The company gained market share for the eighth consecutive quarter, with Old Navy remaining the number one specialty apparel brand in the U.S.

For 2026, Gap forecasts net sales growth of 2% to 3% and adjusted earnings per share of $2.20 to $2.35. The outlook assumes continued strength at Old Navy and Gap brands, stabilizing performance at Banana Republic, and a longer recovery timeline for Athleta.

Gap’s board authorized a new $1 billion share repurchase program, replacing the existing buyback authorization.