Gap stock sinks after earnings. The real story may be what happened to 800 stores

Severe winter storms forced temporary closures at hundreds of Gap Inc. locations during the fourth quarter, a disruption the retailer says weighed on results and investor sentiment.

[Photo: Spencer Platt/Getty Images]

Gap stock is plummeting this morning in early trading after the company reported its fourth-quarter results after the bell yesterday. As of this writing, shares of Gap Inc. (NYSE: GAP) are down more than 12%, and its recent temporary store closures are partly to blame for that. Here’s what you need to know.

Gap’s Q4 2025 results

The iconic retail chain turns 56 this year, and during its long life, it has seen its fair share of ups and downs. The company’s name-brand Gap stores were an iconic mall staple in the 80s and 90s, but in the early 21st century, the brand faced growing competition from online rivals and shifting brand loyalties among Gen Z—something the company has been working to address in recent years.

In addition to its name-brand stores, The Gap also owns the athleisure brand Athleta, the safari-themed brand Banana Republic, and the value brand Old Navy.

In its earnings report yesterday, The Gap reported the following for its fourth quarter, which ended January 31, 2026:

Net sales: $4.2 billion (up 2% year over year)

Net income: $171 million

Diluted earnings per share (EPS): $0.45

Unfortunately for the company, these results were either in line with or below expectations. As noted by CNBC, The Gap’s revenue of $4.2 billion matched analyst expectations. However, its diluted EPS of 45 cents was one cent below the 46 cents analysts were expecting.

Gap further broke out its comparable sales for the fourth quarter across its brands. When it came to comparable sales, the company’s namesake brand, Gap, performed best. Gap saw comparable sales rise 7% versus the same period a year earlier. Banana Republic saw a 4% increase, and Old Navy saw a 3% increase. However, the company’s Athleta brand suffered a huge drop—its comparable sales were down 10% from the same quarter a year earlier.

800 temporary store closures hit The Gap’s bottom line

The Gap’s retail stores are facing many of the same pressures as most physical apparel stores: more price-conscious consumers, prominent online threats from Amazon, Shein, and Temu, and high tariff costs for the quarter. (President Trump’s “Liberation Day tarrifs were not declared illegal by the Supreme Court until February, meaning they were in effect for Gap’s entire Q4.)

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