Gap, Inc.'s stock plummeted 17.18% during intraday trading on Friday, following the apparel retailer's decision to cut its annual sales forecast.

The company revised its fiscal 2026 net sales growth outlook to a range of 1% to 2%, down from its prior forecast of 2% to 3% growth. Management cited significant underperformance at its largest brand, Old Navy, which accounts for approximately 57% of total sales. Specifically, Old Navy's seasonal women's apparel, including dresses, failed to resonate with shoppers, and this weakness has persisted into the current quarter.

Furthermore, the guidance cut reflects broader pressure from budget-strained American consumers who are pulling back on discretionary spending. Record-low consumer sentiment, driven by macroeconomic uncertainty and inflation, is forcing households to cut back on purchases of clothing and accessories, weighing on demand for apparel retailers like Gap.