Gap, Inc. (NYSE:GAP) shares are trading higher premarket Friday after the company reported better-than-expected second-quarter adjusted EPS and raised its FY26 EPS guidance above estimates.
Adjusted EPS of 52 cents exceeded the 48-cent consensus, while sales of $3.651 billion fell short of the $3.690 billion consensus.
Adjusted gross margin expanded 20 basis points to 41.4%, while adjusted merchandise margin increased 80 basis points, including a 30-basis-point benefit from tariff mitigation. Adjusted operating margin, however, fell 70 basis points to 7.1%.
The company paid $62 million in dividends during the quarter, and its board authorized a third-quarter dividend of 17.5 cents per share.
The retailer also repurchased $200 million of shares, bringing year-to-date buybacks to more than $600 million, representing 26 million shares. About $400 million remains available under the current repurchase authorization.
