On June 30, Gap declined 6.75% in regular trading, trading at $18.84 per share, with turnover of approximately $87.41 million.

The decline reflects continued pressure from the underperformance of its largest brand, Old Navy, whose spring/summer collection failed to resonate with consumers. Old Navy accounts for nearly 60% of Gap's total revenue, and management acknowledged that the weakness has extended into the second quarter. BofA Securities recently lowered its price target on Gap from $29 to $26, while the smaller Athleta brand also continued its sales decline trend.

In the prior quarter earnings report, Gap posted fiscal Q1 revenue of $3.50 billion, slightly below the $3.52 billion estimate, and cut its full-year net sales growth outlook to 1%-2% year-over-year from the prior 2%-3% forecast. For Q2, the company guided net sales to be flat to down 1% year-over-year. Despite adjusted EPS guidance of $2.30-$2.40 exceeding analyst expectations of $2.29, Old Navy's persistent softness has weighed heavily on market sentiment.

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