Gap Inc (NYSE:GAP) shares are dipping Friday after the retailer delivered a mixed first‑quarter update and followed it with a cut to its full‑year sales outlook.

Gap stock is feeling bearish pressure. What’s behind GAP decline?

Gap Q1 Details

Gap's earnings performance came in far stronger than analysts anticipated. The company reported earnings of 90 cents per share, more than double the 42 cent estimate. Revenue, however, told a different story. Sales landed at $3.5 billion, just under the $3.52 billion consensus, and that shortfall set a cautious tone despite the sizable earnings beat.

The company said net sales rose 1% from a year ago, while comparable sales improved 2%. Store sales increased 3%. Online sales slipped 2% and made up 38% of total revenue. Gross margin came in at 40.5%, which was 130 basis points lower than last year, and merchandise margin declined by 100 basis points, including an estimated 200‑basis‑point drag from tariffs.

Looking Ahead

The biggest pressure point for the stock came from the updated outlook. Gap lowered its fiscal 2026 revenue forecast to a range of $15.52 billion to $15.67 billion, down from the prior ...