Gap tumbles as tariff impact hits annual profit forecast

GAP

06/03/2026 12:24

** Shares of apparel maker Gap GAP.N plunge 7.9% to $25.05 premarket

** Co forecast annual profit below estimates after market close on Thursday, sees tariff impact of 200 basis points in Q1 gross margin

** Said recent Supreme Court ruling on tariffs not reflected in annual targets, but expects it to have substantial impact on profit

** Expects annual adjusted earnings of about $2.20 to $2.35 per share, below analysts' average estimate of $2.32, according to data compiled by LSEG

** Morningstar analyst David Swartz notes progress under new CEO Richard Dickson after years of weakness, but doesn't expect stock to change materially despite being undervalued

** While leadership changes and assortment resets are underway, recovery is expected to take time given weakness in co's Athleta brand - Jefferies analysts

      ** 13 of 20 brokerages rate the stock "buy" or higher, seven "hold"; their median PT is $30 - data compiled by LSEG

** Stock rose 8% in 2025

 (Reporting by Koyena Das from Bengaluru)

 ((Koyena.das@thomsonreuters.com))