On May 29, Gap fell 13.6% in pre-market trading, trading at approximately $21.10/share, with trading volume of $189,700.

On the news front, Gap reported first-quarter revenue of $3.50 billion, missing the consensus estimate of $3.52 billion. The company subsequently lowered its full-year revenue outlook after its largest brand, Old Navy, delivered below-expectation sales in the fiscal first quarter. CEO Richard Dickson stated that Old Navy's spring/summer collection failed to resonate with consumers, and the weakness has carried into the current quarter.

Old Navy accounts for nearly 60% of Gap's total revenue, meaning any softness in the brand directly weighs on overall company performance. Additionally, athletic brand Athleta continued its sales decline trend. Management noted on the earnings call that its seasonal women's apparel business has again underperformed expectations in the second quarter. Multiple sell-side firms had previously held constructive views expecting Old Navy and Athleta to drive comparable-store sales recovery, making the actual results and forward guidance a significant disappointment that triggered heavy selling.

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