Gap, Inc. (the) · NYSE:GAP
Gap, Inc. (the) — The Gap — Q1 2026 Earnings Presentation
32 slides from Gap, Inc. (the)'s earnings presentation, May 28, 2026
Slide 1: Q1 Fiscal 2026 First Quarter Results
Q1 Fiscal 2026 FIRST QUARTER RESULTS May 28, 2026
Slide 2: Forward Looking Statements / Non-GAAP Financial Measures
Forward Looking Statements / Non-GAAP Financial Measures FORWARD-LOOKING STATEMENTS These materials and related earnings press release and conference call contain forward-looking statements within the “safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. All statements ot
Slide 3: Phases of Transformation
Phases of Transformation PHASE 1: Fix the Fundamentals PHASE 2: Build Momentum PHASE 3: Accelerate Growth
Slide 4: Strategic Priorities
Strategic Priorities Deliver Financial Build Optimize Strengthen & Operational Our Brands Our Platform Our Culture Rigor To deliver consistent To increase brand To advance platform To develop future-ready financial performance relevance, elevate our capabilities that amplify talent and foster a high
Slide 5: FY26 Areas of Focus
FY26 Areas of Focus Growing Core Seeding Growth Accelerators Apparel Business and New Capabilities • Customer-centric assortments • Beauty • Fashiontainment • Culturally relevant storytelling • Accessories • Technology • Elevated customer experience
Slide 6: 2026 First Quarter Highlights
2026 First Quarter Highlights • Net sales of $3.5 billion, up 1% year-over-year; comparable sales up 2% • Achieved the 9th consecutive quarter of positive comparable sales • Delivered gross margin of 40.5%, exceeding our expectations • Strengthened balance sheet with cash, cash equivalents and short
Slide 7: Q1 2026 Snapshot Of Key Financial Metrics
Q1 2026 NET SALES COMPS GROSS MARGIN Snapshot Of Key $3.5B +2% 40.5% +1% VS LY VS +3% LY -130 BPS VS LY Financial Metrics OPEX% OP MARGIN EPS 27.8% 12.7% $0.90 +650 BPS VS LY +520 BPS VS LY VS $0.51 LY
Slide 8: Q1 2026 Snapshot Of Key Financial Metrics - Adjusted
Q1 2026 NET SALES COMPS GROSS MARGIN Snapshot Of Key $3.5B +2% 40.5% +1% VS LY VS +3% LY -130 BPS VS LY Financial Metrics - ADJUSTED ADJUSTED ADJUSTED Adjusted OPEX%(1)(3) OP MARGIN(1)(3) EPS(2)(3) 35.3% 5.2% $0.38 -100 BPS VS LY -230 BPS VS LY VS $0.51 LY 1. Excludes $313 million net gain from a le
Slide 9: Old Navy Net Sales and Comparable Sales Growth
+1% +2% NET SALES COMPARABLE GROWTH (1) SALES 9 CONSECUTIVE QUARTERS OF POSITIVE COMPARABLE SALES 1. Represents first quarter fiscal 2026 year-over-year net sales growth.
Slide 10: Gap Brand Net Sales and Comparable Sales Growth
+1% +1% NET SALES COMPARABLE GROWTH (1) SALES #1 SPECIALTY APPAREL BRAND AND RETAILER IN THE U.S. (2) 1. Represents first quarter fiscal 2026 year-over-year net sales growth. 2. Source: Circana, U.S. Apparel Market, R12M ending April 2026.
Slide 11: Banana Republic Net Sales and Comparable Sales Growth
+10% +10% NET SALES COMPARABLE GROWTH (1) SALES 10 CONSECUTIVE QUARTERS OF POSITIVE COMPARABLE SALES 1. Represents first quarter fiscal 2026 year-over-year net sales growth.
Slide 12: Net Sales and Comparable Sales Growth
+1% +2% NET SALES COMPARABLE GROWTH (1) SALES 4 CONSECUTIVE QUARTERS OF POSITIVE COMPARABLE SALES 1. Represents first quarter fiscal 2026 year-over-year net sales growth.
Slide 13: We remain focused on rebuilding the brand for the long term
(12%) (11%) NET SALES COMPARABLE GROWTH (1) SALES We remain focused on rebuilding the brand for the long term 1. Represents first quarter fiscal 2026 year-over-year net sales growth.
Slide 14: Q1 2026 Financial Position
Q1 2026 Financial Position CASH, CASH EQUIVALENTS, & SHORT-TERM INVESTMENTS(1): • $2.6 billion, up 15% versus last year ENDING INVENTORY: • Inventory flat versus last year with units down CASH FLOW(1): • $213 million net cash from operating activities • $78 million free cash flow CAPITAL STRUCTURE:
Slide 15: Capital Allocation
Capital Allocation 1) INVEST IN BUSINESS • Targeting FY 2026 CapEx of ~$650 million • Investments in technology, stores and supply chain 2) ATTRACTIVE DIVIDEND • Paid $63 million to shareholders in dividends Q1 2026 • Board of Directors approved Q2 2026 dividend of $0.175 per share 3) SHARE REPURCHA
Slide 16: Commitment to Sustainability Performance
Commitment to Sustainability Performance BRIDGING THE BRIDGING THE BRIDGING THE EQUITY GAP CLIMATE GAP OPPORTUNITY GAP 85% Net Zero Top 10 of strategic factories had at least 50% by 2050 target approved in retail ranking by The American of women workers enroll in P.A.C.E. or by the Science Based Opp
Slide 17: Fiscal 2026 Outlook
Fiscal 2026 Outlook METRIC Current FY 2026 OUTLOOK Prior FY 2026 OUTLOOK • Outlook assumptions updated to reflect Section 122 Net sales Up 1% to 2% year-over-year Up 2% to 3% year-over-year 10% tariff rates for 150 day period. • After Section 122 sunsets, outlook assumes IEEPA- Flat to up slightly y
Slide 18: Appendix
Appendix SUPPLEMENTAL MATERIALS
Slide 19: Supplemental Materials Contents
I. Statement of Operations Highlights II. Balance Sheet Highlights III. Cash Flow Statement Highlights IV. Other Metrics V. Comparable Sales by Global Brand VI. Net Sales by Brand and Geography NOTE: All dollar, share, and square footage amounts are shown in millions, with the exception of per share
Slide 20: I. Statement of Operations Highlights
I. Statement of Operations Highlights FY 2025 (2) FY 2026 (2) $ millions FY21 (2) FY22 (2) FY23 (2) FY24 (2) Q1 Q2 Q3 Q4 FY Q1 Net sales $16,670 $15,616 $14,889 $15,086 $3,463 $3,725 $3,942 $4,236 $15,366 $3,497 Cost of goods sold and occupancy 10,033 10,257 9,114 8,859 2,015 2,189 2,272 2,622 9,098
Slide 21: I. Statement of Operations Highlights (Adjusted)
I. Statement of Operations Highlights (Adjusted) FY 2026 $ millions FY21 FY22 FY23 FY24 (1) FY25 (1) Q1 GAAP gross profit $6,637 $5,359 $5,775 $1,417 Restructuring costs (2) - - 4 - Impairment charges (3) - 111 - - Strategic actions in Europe (4) (9) - - - Adjusted gross profit $6,628 $5,470 $5,779
Slide 22: II. Balance Sheet Highlights
II. Balance Sheet Highlights FY 2025 FY 2026 $ millions FY21 FY22 FY23 FY24 Q1 Q2 Q3 Q4 Q1 Assets Cash and cash equivalents $877 $1,215 $1,873 $2,335 $1,976 $2,194 $2,262 $2,616 $2,162 Short-term investments - - - 253 244 238 255 386 399 Merchandise inventory 3,018 2,389 1,995 2,067 2,097 2,294 2,45
Slide 23: III. Cash Flow Statement Highlights
III. Cash Flow Statement Highlights FY 2025 FY 2026 $ millions FY21 FY22 FY23 FY24 Q1 Q2 Q3 Q4 FY Q1 Cash flows from operating activities: Net income (loss) $256 $(202) $502 $844 $193 $216 $236 $171 $816 $339 Adjustments to reconcile net income (loss) to net cash provided by (used for) operating act
Slide 24: IV. Other Metrics
IV. Other Metrics FY 2025 (9) FY 2026 (9) 1. Online sales primarily include sales originating from our online channel including those that are picked up or shipped from stores and net $ millions FY 2021 (9) FY 2022 (9) FY 2023 (9) FY 2024 (9) Q1 Q2 Q3 Q4 FY Q1 sales from revenue-generating strategic
Slide 25: V. Historical Comparable Sales by Global Brand
V. Historical Comparable Sales by Global Brand Comp sales include the results of Company-operated stores and sales through online channels. The calculation of Gap Inc. Comp sales excludes the results of the franchise and licensing business. A store is included in the Comp sales calculations when it
Slide 26: VI. Net Sales by Brand and Geography
VI. Net Sales by Brand and Geography Q1'26 Banana Old Navy Republic $ millions Global Gap Global Global Athleta Global Other (2) Total U.S. (1) $1,834 $608 $375 $262 $4 $3,083 Canada 150 68 37 7 - 262 Other regions 12 120 19 1 - 152 Total $1,996 $796 $431 $270 $4 $3,497 1. U.S. includes the United S
Slide 27: VI. Net Sales by Brand and Geography - Fiscal Year 2025
VI. Q4'25 Old Navy Banana Republic Athleta (2) Fiscal Year $ m illions Global Gap Global Global Global Other Total (1) U.S. $ 2,099 $ 822 $ 482 $ 346 $ 6 $ 3,755 2025 Canada 160 92 48 7 - 307 Other regions 14 140 19 1 - 174 Total $ 2,273 $ 1,054 $ 549 $ 354 $ 6 $ 4,236 NET SALES BY BRAND AND GEOGRAP
Slide 28: VI. Net Sales by Brand and Geography - Fiscal Year 2024
VI. Q4'24 Old Navy Banana Republic Athleta Other (2) Fiscal Year $ millions Global Gap Global Global Global Total (1) U.S. $ 2,043 $ 756 $ 479 $ 385 $ 16 $ 3,679 Canada 154 88 46 10 - 298 2024 Other regions Total $ 15 2,212 $ 136 980 $ 20 545 $ 396 1 $ 16 - $ 172 4,149 NET SALES BY BRAND AND GEOGRAP
Slide 29: VI. Net Sales by Brand and Geography - Fiscal Year 2023
VI. Q4'23 (1) Old Navy Banana Republic Athleta Other (3) Fiscal Year $ m illions Global Gap Global Global Global Total (2) U.S. $ 2,107 $ 768 $ 494 $ 407 $ 17 $ 3,793 2023 Canada 171 99 48 12 - 330 Other regions 10 140 25 - - 175 Total $ 2,288 $ 1,007 $ 567 $ 419 $ 17 $ 4,298 NET SALES BY BRAND AND
Slide 30: VI. Net Sales by Brand and Geography - Fiscal Year 2022
VI. Q4'22 Banana Old Navy Republic Athleta $ m illions Global Gap Global Global Global Other (2) Total Fiscal Year U.S. (1) $ 1,982 $ 709 $ 505 $ 423 $ 2 $ 3,621 Canada 165 91 49 10 - 315 2022 Europe - 35 1 1 - 37 Asia - 181 17 - - 198 Other regions 19 45 6 2 - 72 Total $ 2,166 $ 1,061 $ 578 $ 436 $
Slide 31: VI. Net Sales by Brand and Geography - Fiscal Year 2021
VI. Q4'21 Banana Old Navy Republic (2) (3) $ m illions Global Gap Global Global Athleta Other Total Fiscal Year U.S. (1) $ 2,097 $ 761 $ 532 $ 428 $ 2 $ 3,820 Canada 178 100 54 9 - 341 2021 Europe 1 54 2 1 - 58 Asia 1 219 21 - - 241 Other regions 30 30 4 1 - 65 Total $ 2,307 $ 1,164 $ 613 $ 439 $ 2
Slide 32: Thank You
Thank You