Gap Q2 EPS $1.38 Beats; $417M Tariff Refund Lifts Gross Margin to 52.8%
GAP sits 30% above its 52-week low of $18.11 on elevated volume (2.1× avg).
Summary
Gap's Q2 diluted EPS of $1.38 beat estimates, but the beat was driven by a $417M one-time tariff refund that lifted gross margin to 52.8%. Net sales fell 2% and Old Navy comps declined 4%, while the company repurchased $240M of stock and disclosed new insider selling plans.
Key Events · Earnings and Guidance · GAP
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Q2 EPS $1.38 Beats on Tariff Refund
Diluted EPS of $1.38 vs $0.57 a year ago, driven by a $417M net IEEPA tariff recovery that lifted gross margin to 52.8% from 41.2%.
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Underlying Sales Decline
Net sales fell 2% to $3,651M; Old Navy comparable sales declined 4% and Athleta fell 12%, partially offset by Gap Global up 10%.
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$240M Share Repurchase in Q2
Company repurchased 11M shares for $240M at an average $21.91 per share; $399M remains under the February 2026 $1.0B authorization.
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New Insider 10b5-1 Selling Plans
CFO Katrina O'Connell (706,055 shares), CLO Julie Gruber (622,783 shares), and Chief Supply Chain Officer Sarah Gilligan (417,304 shares) adopted Rule 10b5-1 plans in June-July 2026.
Analysis · GAP · Trade & Services
A $417 million net IEEPA tariff recovery dominated Gap's second-quarter results, lifting gross margin to 52.8% from 41.2% a year ago. Excluding that one-time benefit, underlying operating performance was weaker—net sales fell 2% and Old Navy comparable sales declined 4%. The company also repurchased $240 million of stock in the quarter and disclosed three new 10b5-1 selling plans from top executives, including the CFO. The market already reacted to the earnings beat on August 27, but this 10-Q provides the full financial detail and reveals the extent to which the tariff refund, not operations, drove the profit surge.
How filings like this one have moved
In the 30 days to Sep 14, 2026, 35.8% of the 1045 measured filings Wiseek scored 8 moved their stock by 5% or more by the next session's close. The median move was -0.43%. These are measured outcomes after filings of this importance, not a forecast for this one.
Measured one observation per ticker per day, after exclusions. Current figures: Filing Impact Tracker · open dataset
At the time of this filing, GAP was trading at $23.58 on NYSE in the Trade & Services sector, with a market capitalization of approximately $8.5B. The 52-week trading range was $18.11 to $29.36. This filing was assessed with neutral market sentiment and an importance score of 8 out of 10.