March 5 (Reuters) - Gap forecast annual adjusted profit largely ​below Wall Street estimates on Thursday, as tariffs weigh on ‌the apparel makers' margins and consumers cut discretionary purchases.

Shares of the company fell 8.8% in extended trading. The company's announcement of a $1 billion share repurchase ​program did little to assuage investor jitters after the forecast.

The ​Old Navy parent expects a 200 basis point impact from ⁠U.S. import tariffs on its current-quarter gross margins.

Gap sources about 46% ​of its products from Southeast Asian countries such as Vietnam and Indonesia, ​which were hit by the duties last year, according to its 2024 annual report.

Tariffs have weighed on apparel companies' margins and plans for the year, with the ​recent Supreme Court decision to strike down some tariffs imposed by ​U.S. President Donald Trump further adding to the uncertainty.

Gap expects annual adjusted earnings of about $2.20 ‌to $2.35 ⁠per share, largely below analysts' average estimate of $2.32, according to data compiled by LSEG.

Rivals American Eagle and Abercrombie & Fitch, as well as shoemaker Steve Madden , have also flagged tariff pressures.

Gap's holiday-quarter same-store sales rose ​3%, falling short ​of estimates of ⁠a 3.08% rise, as shoppers, particularly in lower-income households, sought discounts and deferred non-essential spending.

The company posted ​earnings per share of 45 cents, slightly below estimates ​of 46 ⁠cents.

Gap, like its peers, has been investing heavily in advertising to attract shoppers. Its capital expenditure is expected to be about $650 million for the ⁠full ​year, compared with $470 million reported in 2025.

It ​forecast fiscal 2026 net sales to grow between 2% and 3%, in-line with estimates of ​a 2.45% increase.