Why Gap (GAP) Shares Are Trading Lower Today

What Happened?

Shares of clothing and accessories retailer Gap (NYSE:GAP) fell 13.7% in the afternoon session after the company's fourth-quarter earnings report included a disappointing revenue forecast for the upcoming quarter. 

The company met Wall Street's expectations for the fourth quarter, with revenue growing 2.1% year on year to $4.24 billion and GAAP earnings per share of $0.45 coming in line with consensus. Same-store sales, a key metric measuring performance at stores open for at least a year, also rose by a healthy 3%. However, the solid quarterly performance was overshadowed by the company's forward guidance. Gap projected first-quarter 2026 revenue of $3.51 billion, which was slightly below analysts' estimates of $3.53 billion. This weaker-than-expected outlook appeared to be the primary concern for investors, suggesting potential challenges ahead and triggering a significant sell-off in the stock.

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What Is The Market Telling Us

Gap’s shares are very volatile and have had 22 moves greater than 5% over the last year. But moves this big are rare even for Gap and indicate this news significantly impacted the market’s perception of the business.

The biggest move we wrote about over the last year was 11 months ago when the stock dropped 22.2% on the news that President Trump announced "reciprocal tariffs" on all US imports, set at a minimum rate of 10%. 

From clothing brands and electronics makers to the e-commerce sites that move their goods, companies built on global supply chains took the biggest hit. Stocks with heavy exposure to Asia were especially hard-hit, as the new tariffs threatened the growth and profits of firms with factories in the region. Vietnam, central to many companies' production plans, faced a 46% tariff. Cambodia and Indonesia were also in the crosshairs, with tariff rates of 49% and 32%. These measures could significantly erode the competitiveness of goods produced in those regions. For example, reduced production volumes would negatively affect the sales growth of all companies benefiting from these manufacturing hubs.

Gap is down 6.6% since the beginning of the year, and at $23.53 per share, it is trading 19.2% below its 52-week high of $29.13 from February 2026. Investors who bought $1,000 worth of Gap’s shares 5 years ago would now be looking at an investment worth $814.58.

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