Gap Inc. Reports Mixed Q2 2026 Results: Old Navy Struggles While Gap Brand Shines — The Gap, Inc.

Event summary

Gap Inc. reported a 2% decline in net sales for Q2 2026, with comparable sales down 1%.
Old Navy's net sales dropped 4%, while Gap brand saw a 9% increase in net sales.
The company exceeded profit expectations due to gross margin strength, partly from tariff recoveries.
Gap Inc. returned $726 million to shareholders year-to-date through share repurchases and dividends.
Michael Francis announced as the next President and CEO of Old Navy, succeeding Haio Barbeito.

The big picture

Gap Inc.'s Q2 2026 results highlight the divergent performance of its brands, with Old Navy facing significant headwinds while Gap continues to thrive. The company's ability to manage costs and navigate tariff uncertainties will be crucial in maintaining profitability. The leadership change at Old Navy adds another layer of strategic importance as the brand seeks to regain its footing in a competitive retail landscape.

What we're watching

Brand Performance: Whether Gap can sustain its momentum while Old Navy addresses its current challenges.
Cost Management: The impact of tariff recoveries and mitigation strategies on future gross margins.
Leadership Transition: How Michael Francis's leadership will influence Old Navy's turnaround efforts.