Gap Poised to Top Street Views for Third-Quarter Sales, UBS Says

12:59 PM EST, 11/10/2026 (MT Newswires) -- Gap's (GAP) third-quarter sales are expected to exceed Wall Street's estimates, while the company is likely to maintain its full-year outlook, UBS Securities said Tuesday. The brokerage increased its net sales outlook for the apparel retailer to $4.05 billion from $4.02 billion for the quarter, indicating a 2.8% year-over-year rise. The Street is looking for 1.9% growth, UBS said in a note to clients. "Our analysis of industry-observed sales, observed customers, estimated visits, web traffic, and social media trends indicates Gap's (third-quarter) sales growth should come in slightly above consensus," UBS analysts Jay Sole and Mauricio Serna said. "We believe the market has a similar view of solid (third-quarter) sales trends." The brokerage cut its adjusted earnings outlook for the company to $0.78 a share from $0.82 for the quarter. The Street is modeling $0.79, UBS said. "Our EPS estimate change is mostly due to updated revenue by brand, (selling, general, and administrative expenses), and diluted share assumptions," the analysts said. The brokerage expects the company to maintain its full-year guidance. In August, Gap raised its 2026 adjusted earnings outlook, but lowered the top end of its revenue growth guidance. "While some investors are concerned about the impact of inflation on margins, we believe management's guidance already incorporates the impact of (year-to-date) commodity price trends," Sole and Serna said Tuesday. Gap is scheduled to report results Nov. 19. Although the company's recent product launches, marketing initiatives, and brand activations are expected to have supported sales growth in the fourth quarter so far, Old Navy brand's recovery continues to be the "key variable," the analysts said. "We think these initiatives provide a supportive backdrop for (the fourth quarter), but evidence of sustained Old Navy improvement and healthy holiday sell through will be important, particularly given promotional pressure and elevated inventory availability," Sole and Serna said. Gap shares were down 1.2% in Tuesday afternoon trade, taking its year-to-date decline to 14%. The brokerage has a buy rating on the company's stock, with a $42 price target. Urban Outfitters (URBN) and Abercrombie & Fitch (ANF) are scheduled to report results Nov. 24. Price: 21.98, Change: -0.25, Percent Change: -1.15