Gap — May 28, 2026 release

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% Adjusted operating expense (% of net sales) About flat year-over-year About flat year-over-year 33.5% Adjusted operating margin About 7.3% to 7.5% About 7.3% to 7.5% 7.3% Net interest income Approximately $25 million Approximately $10 million to $15 million $17 million Effective tax rate Approximately 25% Approximately 27% 27.9% Diluted weighted average share count Approximately 375 million N/A 384 million Adjusted diluted earnings per share Approximately $2.30 to $2.40 Approximately $2.20 to $2.35 $2.13 Capital expenditures Approximately $650 million Approximately $650 million $470 million Net store closures 2 About flat About flat 32 Second Quarter Fiscal 2026 Second Quarter Fiscal 2026 Outlook Q2 2025 Results Net sales Flat to down 1% year-over-year $3.7