Gap — May 28, 2026 release

The current outlook assumes a 10 percent tariff rate under Section 122 for inventory received after February 24, 2026 through July 24, 2026, followed by a reversion for the remainder of the year to the IEEPA-level tariff rates reflected in the Company's prior outlook. This is expected to result in approximately $80 million of net tariff relief to gross profit and operating income, or approximately 50 basis points of benefit to gross margin and operating margin in fiscal 2026. The benefit is expected to be concentrated in the second and third fiscal quarters based on the timing of receipts. The Company is currently reserving the full estimated benefit to provide flexibility in managing the business through the remainder of the year, with approximately half intended to offset the potential impact of sustained elevation in fuel costs and the balance available to respond to potential changes in the promotional and competitive environment. On a reported basis, the Company expects full year diluted earnings per share to be approximately $2.83 to $2.93, operating expense leverage, and operating margin expansion each including the impact of non-recurring items. All fiscal 2026 outlook measures provided below exclude the net impact of non-recurring items. Full Year Fiscal 2026   Current FY 2026 Outlook Prior FY 2026 Outlook FY 2025 Results 1 Net sales Up 1% to 2% year-over-year Up 2% to 3% year-over-year $15.4 billion Gross margin Flat to up slightly year-over-year Flat to up slightly year-over-year 40.8% Ad