Gap Momentum Offsets Weakness at Old Navy, BofA Says

11:09 AM EDT, 08/28/2026 (MT Newswires) -- Gap (GAP) reported a mixed Q2 performance, with momentum at Gap brand offset by uncertainty at Old Navy, BofA Securities said in a Friday note. "We are encouraged by momentum at Gap but remain concerned that Old Navy's lower-end customer will continue to be pressured by the tough macro climate," the note said. While comparable sales grew 10% at Gap, Old Navy recorded a 4% decline, driven by seasonal product that didn't resonate and a marketing campaign that failed to drive traffic, the note said. Looking ahead, the report said Old Navy entered Q3 with "cleaner" inventory levels and is seeing a positive response to its Fall product line, resulting in improved trends in August. BofA kept its neutral rating while raising its price target to $27 from $26 on the back of higher earnings estimates. Price: 23.77, Change: +2.98, Percent Change: +14.33