Gap Shares Fall After Double Miss Despite Comparable Sales Growth

Core Viewpoint - Gap, Inc. reported disappointing fourth-quarter financial results, leading to a decline in its stock price despite some positive sales trends [1][7]. Financial Performance - Earnings per share were reported at 45 cents, missing the consensus estimate of 46 cents [2]. - Revenue for the quarter was $4.23 billion, slightly below the consensus estimate of $4.24 billion [2]. - Comparable sales increased by 3%, marking the eighth consecutive quarter of positive growth [2]. Brand Performance - Old Navy reported net sales of $2.3 billion, up 3% year over year, with comparable sales also rising 3% [4]. - Gap brand net sales totaled $1.1 billion, an increase of 8% from last year, with comparable sales up 7% [4]. - Banana Republic posted net sales of $549 million, up 1% year over year, with comparable sales rising 4% [4]. - Athleta reported net sales of $354 million, down 11% from last year, with comparable sales declining 10% [4]. Cash Position and Shareholder Returns - The company ended the year with $3.0 billion in cash, cash equivalents, and short-term investments [4]. - A new $1 billion share repurchase authorization was approved by the board [5]. - The company announced a first-quarter fiscal 2026 dividend of $0.175 per share, reflecting a 6% increase from the previous dividend [5]. Future Outlook - For the fiscal year, adjusted earnings per share are projected to be between $2.20 and $2.35, compared to the consensus estimate of $2.32 [6]. - Revenue expectations for the fiscal year range from $15.70 billion to $15.86 billion, against a consensus estimate of $15.75 billion [6]. - For the first quarter, revenue is anticipated to be between $3.53 billion and $3.57 billion, aligning with the consensus estimate of $3.53 billion [6].