Gap's Shares Gain 15% on Q2 Earnings Beat & Revised View

GAP reported second-quarter adjusted earnings per share of $0.52, exceeding consensus estimates, and shares surged 15%. The company posted a 2% revenue decline overall, but the Gap brand delivered 10% comparable sales growth. Old Navy comps fell 4%, while Athleta dropped 12%.

Gross margins expanded 20 basis points in the quarter. Management raised full-year adjusted EPS guidance to a range of $2.35 to $2.45, citing continued margin expansion and ongoing share repurchase activity as key drivers.

The divergence across brands underscores GAP's uneven recovery: the namesake Gap label is gaining traction while Old Navy and Athleta continue to lag. The guidance lift signals management confidence in sustaining profitability improvements despite top-line pressure.