MW Gap tried to temper expectations for its quarterly results. Wall Street was still disappointed.

By Bill Peters

Same-store sales growth of 1% came in below expectations

Shares of Gap Inc. slid after hours on Thursday after the clothing retailer reported second-quarter sales trends and a third-quarter forecast that disappointed Wall Street.

The results follow subdued expectations for the quarter, as the company searches for stronger gains at its Banana Republic and Athleta stores, and as other chains - such as Urban Outfitters Inc. $(URBN)$ and department-store chain Kohl's Corp. $(KSS)$ - have shown signs of turning things around.

Shares of Gap (GAP,) which also owns Old Navy, were down 6.5% after hours.

Gap reported $3.725 billion in sales for the quarter, compared with Wall Street's expectations for $3.733 billion. Same-store sales rose 1%, below analyst estimates for a 2% gain. Earnings of 57 cents a share topped forecasts for 55 cents.

The company said it expects third-quarter sales growth of 1.5% to 2.5, roughly in line with FactSet estimates. Gap stuck with its full-year outlook. Management said the forecasts included the estimated impact of the latest tariff rates, which have threatened to raise prices on already inflation-weary consumers.

-Bill Peters

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August 28, 2025 16:43 ET (20:43 GMT)

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