32 slides from Gap, Inc. (the)'s earnings presentation, Aug 27, 2026
Slide 1: Q2 Fiscal 2026 Second Quarter Results
Q2 Fiscal 2026 SECOND QUARTER RESULTS August 27, 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 Second Quarter Highlights
2026 Second Quarter Highlights • Net sales of $3.7 billion, down 2% year-over-year; comparable sales down 1% • Exceeded profit expectations in the quarter • Adjusted gross margin of 41.4%(1), exceeding outlook • Adjusted operating margin of 7.1%(1), while investing strategically in future growth acc
Slide 7: Q2 2026 Snapshot Of Key Financial Metrics
Q2 2026 NET SALES COMPS GROSS MARGIN(1) Snapshot Of Key $3.7B (1)% 52.8% -2% VS LY VS +1% LY +1,160 BPS VS LY Financial Metrics OPEX% OP MARGIN(2) EPS(3) 34.3% 18.5% $1.38 +90 BPS VS LY +1,070 BPS VS LY VS $0.57 LY 1. Includes $417 million or 1,140 basis points of net benefit related to IEEPA tariff
Slide 8: Q2 2026 Snapshot Of Key Financial Metrics - Adjusted
Q2 2026 ADJUSTED NET SALES COMPS GROSS MARGIN(1) Snapshot Of Key $3.7B (1)% 41.4% -2% VS LY VS +1% LY +20 BPS VS LY Financial Metrics - ADJUSTED ADJUSTED Adjusted OPEX% OP MARGIN(1) EPS(1) 34.3% 7.1% $0.52 +90 BPS VS LY -70 BPS VS LY VS $0.57 LY 1. Excludes net benefit related to IEEPA tariff refund
Slide 9: Net Sales Growth / Comparable Sales
(2)% (1)% NET SALES COMPARABLE GROWTH (1) SALES #1 SPECIALTY APPAREL RETAILER IN THE U.S.(2) 1. Represents second quarter fiscal 2026 year-over-year net sales growth. 2. Source: Circana, U.S. Apparel Market, R12M ending July 2026.
Slide 10: Net Sales Growth / Comparable Sales
(4)% (4)% NET SALES COMPARABLE GROWTH (1) SALES #1 SPECIALTY APPAREL BRAND AND RETAILER IN THE U.S. (2) 1. Represents second quarter fiscal 2026 year-over-year net sales growth. 2. Source: Circana, U.S. Apparel Market, R12M ending July 2026.
Slide 11: Net Sales Growth / Comparable Sales
+9% +10% NET SALES COMPARABLE GROWTH (1) SALES 11 CONSECUTIVE QUARTERS OF POSITIVE COMPARABLE SALES 1. Represents second quarter fiscal 2026 year-over-year net sales growth.
Slide 12: Net Sales Growth / Comparable Sales
+1% +3% NET SALES COMPARABLE GROWTH (1) SALES 5 CONSECUTIVE QUARTERS OF POSITIVE COMPARABLE SALES 1. Represents second quarter fiscal 2026 year-over-year net sales growth.
Slide 13: We remain focused on disciplined execution as we rebuild the brand profitably
(12%) (12%) NET SALES COMPARABLE GROWTH (1) SALES We remain focused on disciplined execution as we rebuild the brand profitably 1. Represents second quarter fiscal 2026 year-over-year net sales growth.
Slide 14: Q2 2026 Financial Position
Q2 2026 Financial Position CASH, CASH EQUIVALENTS, & SHORT-TERM INVESTMENTS: • $2.5 billion, up 2% versus last year ENDING INVENTORY: • Inventory flat versus last year YEAR-TO-DATE CASH FLOW(1): • $550 million net cash from operating activities • $261 million free cash flow CAPITAL STRUCTURE: All-Br
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 $62 million to shareholders in dividends Q2 2026 • Board of Directors approved Q3 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 100% Net Zero 10% of strategic factories participated in by 2050 target approved of entry-level store employees hired from RISE, reaching over 113,000 workers in by the Science Base
Slide 17: Fiscal 2026 Outlook
Fiscal 2026 Outlook • Narrowing full-year net sales growth outlook to up 1% to METRIC Current FY 2026 OUTLOOK Prior FY 2026 OUTLOOK 1.5%, reflecting second-quarter performance. Net sales Up 1% to 1.5% Up 1% to 2% • Updating Old Navy comparable sales outlook to approximately flat to down 1% (previous
Slide 18: Appendix
Appendix SUPPLEMENTAL MATERIALS
Slide 19: Supplemental materials index
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) (2) (2) (2) (2) $ millions FY21 FY22 FY23 FY24 Q1 Q2 Q3 Q4 FY Q1 Q2 Net sales $ 16,670 $ 15,616 $ 14,889 $ 15,086 $ 3,463 $ 3,725 $ 3,942 $ 4,236 $ 15,366 $ 3,497 $ 3,651 Cost of goods sold and occupancy expenses 10,033 10,257 9,114 8,859
Slide 21: I. Statement of Operations Highlights (Adjusted)
I. Statement of Operations Highlights (Adjusted) FY 2026 (1) (1) $ m illions FY21 FY22 FY23 FY24 FY25 Q1 Q2 GAAP gross profit $6,637 $5,359 $5,775 $1,417 $1,929 Restructuring costs (2) - - 4 - - Impairment charges (3) - 111 - - - Strategic actions in Europe (4) (9) - - - - Net tariff refund recovery
Slide 22: II. Balance Sheet Highlights
II. Balance Sheet Highlights FY 2025 FY 2026 $ m illions FY21 FY22 FY23 FY24 Q1 Q2 Q3 Q4 Q1 Q2 Assets Cash and cash equivalents $ 877 $ 1,215 $ 1,873 $ 2,335 $ 1,976 $ 2,194 $ 2,262 $ 2,616 $ 2,162 $ 2,103 Short-term investments - - - 253 244 238 255 386 399 382 Merchandise inventory 3,018 2,389 1,9
Slide 23: III. Cash Flow Statement Highlights
III. Cash Flow Statement Highlights FY 2025 FY 2026 $ m illions FY21 FY22 FY23 FY24 Q1 Q2 Q3 Q4 FY Q1 Q2 Cash flows from operating activities: Net income (loss) $ 256 $ (202) $ 502 $ 844 $ 193 $ 216 $ 236 $ 171 $ 816 $ 339 $ 501 Adjustments to reconcile net income (loss) to net cash provided by (use
Slide 24: IV. Other Metrics
IV. Other Metrics (9) (9) FY 2025 FY 2026 (9) (9) (9) (9) $ m illions FY 2021 FY 2022 FY 2023 FY 2024 Q1 Q2 Q3 Q4 FY Q1 Q2 Store and franchise sales $ 10,239 $ 9,651 $ 9,346 $ 9,332 $ 2,107 $ 2,440 $ 2,368 $ 2,470 $ 9,385 $ 2,162 $ 2,379 Online sales (1) $ 6,431 $ 5,965 $ 5,543 $ 5,754 $ 1,356 $ 1,2
Slide 25: V. Historical Comparable Sales by Global Brand
V. FY 2026 Q1 Q2 Q3 Q4 FY Old Navy Global 1% -4% -1% Historical Gap Global 10% 10% 10% Banana Republic Global 2% 3% 2% Athleta Global -11% -12% -11% Comparable Gap Inc. 2% -1% 0% FY 2025 Q1 Q2 Q3 Q4 FY Sales by Old Navy Global 3% 2% 6% 3% 3% Gap Global 5% 4% 7% 7% 6% Banana Republic Global 0% 4% 4%
Slide 26: VI. Net Sales by Brand and Geography
VI. Net Sales by Brand and Geography Q2'26 Banana Old Navy Republic Athleta $ m illions Global Gap Global Global Global Other (2) Total (1) U.S. $ 1,897 $ 654 $ 413 $ 255 $ 4 $ 3,223 Canada 152 81 45 8 - 286 Other regions 12 109 20 1 - 142 Total $ 2,061 $ 844 $ 478 $ 264 $ 4 $ 3,651 Q1'26 Banana Old
Slide 27: VI. Net Sales by Brand and Geography - Fiscal Year 2025
VI. Q4'25 Old Navy Banana Republic Athleta Other (2) Fiscal Year $ m illions Global Gap Global Global Global 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 Banana Old Navy Republic Athleta (2) Fiscal Year $ m illions Global Gap Global Global Global Other Total (1) U.S. $ 2,043 $ 756 $ 479 $ 385 $ 16 $ 3,679 2024 Canada 154 88 46 10 - 298 Other regions 15 136 20 1 - 172 Total $ 2,212 $ 980 $ 545 $ 396 $ 16 $ 4,149 NET SALES BY BRAND AND GEOGRA
Slide 29: VI. Net Sales by Brand and Geography - Fiscal Year 2023
VI. Banana (1) Q4'23 Old Navy Republic Athleta (3) Fiscal Year $ m illions Global Gap Global Global Global Other 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 Athleta $ m illions Global Gap Global Global Global Other (2) Total Fiscal Year U.S. (1) $ 2,097 $ 761 $ 532 $ 428 $ 2 $ 3,820 Canada 178 100 54 9 - 341 Europe 1 54 2 1 - 58 2021 Asia Other regions 30 1 219 30 21 4 - 1 - - 241 65 Total $ 2,307 $ 1,164 $ 613 $ 439 $
Slide 32: Thank You
Thank You