Sales at Gap‘s largest brand Old Navy fell short of expectations during its fiscal first quarter, leading the retailer to cut its sales guidance on Thursday.

During the quarter, Old Navy’s comparable sales grew 1%, while analysts expected them to grow 3%, according to StreetAccount.

As a result, Gap cut its sales outlook and is now expecting companywide sales to grow between 1% and 2%, down from a prior range of between 2% and 3%.

Gap’s stock dropped more than 14% in extended trading following the results.

In an interview with CNBC, CEO Richard Dickson attributed the sluggish sales to a spring and summer assortment that failed to land with shoppers – not a larger macroeconomic issue. 

“It’s not a consumer issue,” said Dickson. “We’re winning with all income cohorts across low, middle, and high. When you have the right product at the right price value equation, customers are there, and our seasonal categories just got off to a weaker start.”

While Old Navy caters to lower- to middle-income shoppers, who have felt economic shocks like soaring gas prices more acutely than higher-income cohorts, those customers are still shopping — just in different categories.

Dickson said sales of Old Navy’s dresses and swimming shorts were particularly weak, while active, denim and kids categories were strong. He said the brand is working to boost sales with better price points and marketing and has seen trends start to improve.

Still, as Old Navy’s slowdown has persisted into the current quarter, the company is taking a “moderated view” of the year, Dickson said. Considering that the brand accounts for almost 60% of Gap’s overall revenue, any pressure on Old Navy impacts the entire company.

While Gap cut its sales outlook for the year, its profitability is another story. The company raised its guidance and is now expecting adjusted earnings per share to be between $2.30 and $2.40, compared with a prior range of between $2.20 and $2.35. 

Here’s how the specialty apparel company performed during the fiscal first quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

• Earnings per share: 38 cents adjusted vs. 37 cents expected  
• Revenue: $3.50 billion vs. $3.52 billion expected

Sales rose to $3.50 billion, up slightly from $3.46 billion a year earlier. 

The company’s reported net income for the three-month period that ended May 2 was $339 million, or 90 cents per share, compared with $193 million, or 51 cents per share, a year earlier. Excluding one-time items related to a hefty legal settlement, Gap saw earnings per share of 38 cents. 

Chief Financial Officer Katrina O’Connell attributed the higher earnings forecast to tax rate favorability and interest income. The company is expecting an $80 million benefit from reduced tariff rates, but she said she didn’t factor that into the guidance and is instead reserving it. Half will be put aside to account for higher fuel prices, while the other half will be reserved in case the company needs to dial up promotions to stimulate demand.

Here’s a closer look at how each brand performed.

Gap: Comparable sales at Gap’s namesake banner, the center of its turnaround, soared 10% during the quarter, far better than the 5.5% growth analysts had expected, according to StreetAccount. Sales overall grew 10% as well to $796 million. The right marketing and a better presence in key categories like denim, fleece and kids drove the quarter. 

Banana Republic: Comparable sales fell short at the workwear brand, growing 2% while analysts had expected 4%, according to StreetAccount. Overall sales grew 1% to $431 million. It’s the fourth consecutive quarter of positive comparable sales at Banana Republic. Earlier this month, Gap announced the former CEO of PVH Americas, Donald Kohler, was appointed to be the brand’s next CEO. “We’re getting better in women’s, including pants and sweaters in particular that performed well,” said Dickson. “[Kohler] brings incredible, deep experience across luxury, premium, specialty retail and we’re really excited for him to lead the brand’s next chapter.”

Athleta: Sales at Gap’s athleisure brand continued to suffer. Comparable sales were down 11% while overall sales fell 12%. New CEO Maggie Gauger, a Nike veteran, has worked to streamline the assortment, and Dickson expects some improvement in the back half of the year. “It’s in the hands of the consumer,” he said. “We’ve just got to deliver that to them, and then we’ll see how they respond.”

Old Navy: Sales grew 1% to $2 billion, while comparable sales were up 1%, worse than expected. 

PARIS — World No. 1 Jannik Sinner was granted a medical timeout for apparent cramping during his second-round match at the 2026 French Open on Thursday, a decision that sparked immediate controversy and sharp criticism from TNT analyst and former player Jim Courier.

Sinner, who had dominated the first two sets against Argentina’s Juan Manuel Cerundolo, suddenly faltered in the third set while leading 5-1. After losing 15 consecutive points and appearing to grab his back, the Italian requested assistance. Following a conversation with the chair umpire in which Sinner mentioned concerns about dehydration, officials allowed him to take a medical timeout and briefly leave the court for treatment.

Courier, calling the match for TNT, strongly disagreed with the ruling. “This is absolute baloney,” he said on air. “That’s not fair. That’s not right.” He added later, “We love the top players, they drive the sport, but you’ve gotta apply the rules fairly. The rules are being bent for the top players.”

Tennis rules generally prohibit medical timeouts specifically for cramping, as the condition is often viewed as a fitness issue rather than an acute injury. The decision allowed Sinner time to recover, after which he returned to the court but ultimately dropped the third set, extending the match.

Match Context and Turning Point

Sinner entered the match as the clear favorite, having won the first two sets convincingly. His sudden physical decline at 5-1 in the third set shifted momentum dramatically in favor of Cerundolo, who capitalized on the Italian’s apparent discomfort to force a fourth set.

The timeout came at a critical juncture. While Sinner eventually regained some composure, the incident raised questions about consistency in rule enforcement, particularly for top-ranked players. Tennis analysts noted that lower-ranked players have occasionally been denied similar requests in past tournaments.

Sinner has dealt with occasional physical issues in the past, including a hip problem that affected his preparation for earlier events. However, he entered the 2026 French Open as the top seed and defending champion from previous hard-court successes, making the cramping episode unexpected.

Reactions and Rule Debate

Courier’s pointed criticism resonated widely on social media and among tennis observers. The former French Open champion emphasized that while he respects Sinner’s talent, the rules should apply equally regardless of ranking.

The International Tennis Federation and ATP Tour have clear guidelines on medical timeouts. Players may receive treatment for verifiable injuries or illnesses, but cramping is typically not eligible for such breaks to prevent strategic abuse. Umpires have discretion in borderline cases, which often leads to debate.

This is not the first time a high-profile player has faced scrutiny over medical timeouts at Roland Garros. Similar incidents in previous years involving other top players have prompted calls for stricter enforcement and clearer guidelines from governing bodies.

Sinner’s team has not publicly commented on the specific incident beyond standard post-match remarks. Cerundolo, who mounted a strong comeback attempt, focused on his own performance when speaking briefly with media after the match.

Broader Implications for Tennis

The controversy highlights ongoing challenges in professional tennis regarding player fitness, rule consistency, and the balance between athlete welfare and competitive fairness. As the sport’s physical demands increase with longer seasons and more powerful playing styles, cramping and fatigue-related issues have become more common.

Many players and coaches have called for better hydration protocols, improved scheduling, and potentially longer recovery periods between matches at Grand Slams. However, others argue that current rules already provide sufficient flexibility and that further leniency could undermine the sport’s integrity.

The French Open, known for its demanding clay courts and longer rallies, has historically seen more physical issues than faster surfaces. Organizers have increased medical support and cooling breaks in recent years, but debates over when such interventions cross into unfair advantages persist.

Sinner’s Path at Roland Garros

Despite the third-set setback, Sinner remained the strong favorite to advance. His overall dominance in 2025 and 2026, including multiple Grand Slam titles, has established him as the clear leader in men’s tennis. The incident, while controversial, did not appear to derail his campaign entirely, though it provided ammunition for critics questioning his resilience under pressure.

Cerundolo, ranked outside the top 50, played inspired tennis after the timeout and pushed the match longer than many expected. His performance earned respect from observers, even in defeat.

Fan and Media Response

Social media reaction was swift and divided. Supporters of Sinner argued that dehydration concerns justified the timeout and that the umpire made the correct on-court decision. Critics, including many neutral fans, sided with Courier’s assessment that the rules appeared to be applied inconsistently.

Broadcast clips of the umpire conversation and Courier’s commentary quickly went viral, amplifying the discussion. Tennis commentators on other platforms echoed concerns about fairness in high-stakes matches.

As the tournament progresses, officials may face increased scrutiny on medical timeout decisions. The French Tennis Federation has not issued an immediate statement on the specific incident.

Looking Ahead in the Tournament

Sinner’s match highlighted the physical toll of best-of-five set Grand Slam tennis. With temperatures rising in Paris during the second week, hydration and recovery management will remain critical for all players.

The controversy also comes at a time when tennis governing bodies are reviewing rules to modernize the sport while preserving its traditions. Any changes regarding medical timeouts would likely require extensive consultation with players, umpires and medical experts.

For now, the focus returns to on-court action. Sinner, despite the hiccup, remains a top contender for the 2026 French Open title. His ability to overcome physical challenges could become a defining narrative of his campaign.

The incident serves as a reminder of the fine line between legitimate medical needs and competitive strategy in elite tennis. As technology and sports science advance, expect continued debate over how best to balance player health with the spirit of fair competition.

American Eagle‘s two key brands are moving in different directions.

Revenue at the retailer’s namesake banner fell during its fiscal first quarter, even after it ramped up its marketing campaign with actress Sydney Sweeney. Meanwhile, sales at its intimates brand Aerie spiked during the quarter.

The trends at the retailer appeared to disappoint Wall Street, as shares tumbled more than 10% in extended trading.

In the three months ended May 2, comparable sales at the American Eagle banner fell 2%, far worse than the 3.1% growth that analysts had expected, according to StreetAccount. Meanwhile, comparable sales at Aerie soared 25%, beating expectations of 19.1%.

Net revenue for the American Eagle brand dropped 2% to $678.4 million, while Aerie revenue jumped about 34% to $480.83 million.

Combined, the business saw comparable sales grow 8%, short of expectations of 8.6%, according to StreetAccount. 

“While results at American Eagle were mixed, our teams are moving decisively to reignite the women’s business and strengthen product execution and brand positioning,” CEO Jay Schottenstein said in a news release

“Looking ahead, our priorities are clear. Despite continued consumer and macroeconomic uncertainty, we remain confident in our ability to navigate near-term headwinds,” he added.” We are focused on operational excellence and disciplined execution to drive long-term value for AEO and our shareholders.” 

Here’s how the apparel company performed during the fiscal first quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

• Earnings per share: 14 cents vs. 12 cents expected
• Revenue: $1.20 billion vs. $1.19 billion expected

During the quarter, American Eagle posted net income of $23.53 million, or 14 cents per share, compared with a loss of $64.90 million, or 36 cents per share, a year earlier. 

Sales rose to $1.20 billion, up 10% from $1.09 billion a year earlier. 

American Eagle reiterated full-year guidance and issued an outlook for the current quarter. For the year, the company expects mid-single digit percentage comparable sales growth and an increase in gross margin.

In the second quarter, the retailer is expecting comparable sales to rise by a mid-to-high single digit percentage, compared to estimates of 6.5% growth, according to StreetAccount. It’s expecting its gross margin to be down compared to the prior year during the period.

During the quarter, American Eagle reignited its campaign with the “Euphoria” star Sweeney ahead of the summer shopping season, but took a tamer approach than the controversial campaign it launched last year under the slogan: “Sydney Sweeney has great jeans.” This time around, instead of cleavage and double entendres, Sweeney was all smiles in a modest, casual look on the beach. 

Though the two campaigns were different, the effect has been the same – neither led to a major increase in sales at American Eagle’s namesake banner. 

During a call with analysts, Schottenstein said marketing is leading to stronger engagement among new and existing customers, but moving forward, the company will “recalibrate spending” to ensure it’s getting the strongest return on investment. Later on, President Jennifer Foyle said marketing has driven “awareness and consideration” and now the company is “focused on conversion.”

During the quarter, selling, general and administrative costs, which include marketing, increased 11% to $376 million — which was in line with sales growth at Aerie but less so at American Eagle. For the back half of the year, the company said it plans to focus more of its marketing dollars on social influencers and other forms of digital media, which carry a higher propensity of conversion, the company said.

Beyond marketing woes, Foyle said the sales declines at American Eagle primarily came from the women’s bottoms segment — not having enough of the styles shoppers wanted and too much of the ones they didn’t.

“As merchants, we move quickly when we see opportunities and when we see misses. And we are already making adjustments. As we head into the crucial back-to-school season, we are refining our bottoms architecture, specifically optimizing key silhouettes and risers while leveraging our chase capabilities to inject fresh newness,” said Foyle. “At the same time, we are scaling high-demand categories within women’s tops to fully maximize ongoing consumer momentum.”

When asked how its core consumer was holding up given high gas prices and other macroeconomic pressures, Schottenstein said he thinks the U.S. economy is “very strong” and only going to get better.

“We think with gas prices hopefully will start settling down very shortly and with the, you know, current affairs, hopefully we’ll come to some type of finish,” said Schottenstein. “Hopefully it’ll be a very good finish for the world and we’re very optimistic on that.”

“As Americans struggle with the rising cost of gas, groceries, housing, and health care, President Trump’s priorities for taxpayer dollars are completely detached from the challenges families face every day,” Warner, a Democrat from Virginia, said in a statement.