Gap — Mar 5, 2026 release

Fiscal 2026 Outlook The fiscal 2026 full year and first quarter outlook provided below are based on tariff rates in effect prior to February 20, 2026. Separately, the company is expecting a net gain of $313 million in the first quarter of 2026 related to a legal settlement and is concurrently pledging to make a charitable donation of $50 million to a combination of the Gap Foundation and our donor advised fund. Including the net benefit of both the gain and donation, the company expects full year reported diluted earnings per share to be approximately $2.71 to $2.86, reported operating expense leverage, and reported operating margin expansion. For the first quarter, the company expects reported operating expense leverage. All fiscal 2026 outlook measures provided below exclude the impact of these items. Full Year Fiscal 2026   Full Year Fiscal 2026 Outlook Full Year Fiscal 2025 Results 1 Net sales Up 2% to 3% year-over-year $15.4 billion Gross margin Flat to up slightly year-over-year 40.8% Adjusted operating expense (% of net sales) About flat year-over-year 33.5% Adjusted operating margin About 7.3% to 7.5% 7.3% Net interest income Approximately $10 million to $15 million $17 million Effective tax rate Approximately 27% 27.9% Adjusted diluted earnings per share Approximately $2.20 to $2.35 $2.13 Capital expenditures Approximately $650 million $470 million Net store closures 2 About flat 32 1 There were no adjusted metrics during fiscal 2025; therefore, reported amounts for operating expense as a percentage of net sales,