Gap cuts sales outlook on weak discretionary demand
Gap reduced its fiscal 2026 sales growth forecast to 1% to 2% as budget-strained consumers pull back on discretionary apparel purchases. Despite the lower revenue outlook, the retailer raised its annual profit guidance due to expected tariff relief and reported first-quarter sales of $3.50 billion.
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Gap Inc cut its fiscal 2026 sales growth forecast to 1% to 2%, down from prior guidance of 2% to 3%, as shares fell 13% in extended trading. The company missed quarterly revenue estimates by $20 million amid budget-strained households pulling back on discretionary spending. This forecast cut signals mounting pressure on consumer demand as U.S. consumer sentiment slumped to a record low in May and inflation posted its largest gain in three years.
