Gap Inc. (GAP) experienced a sharp 24-hour plunge of 15.20% in extended trading on Thursday. The significant drop followed the release of the apparel retailer's first-quarter financial results and a downward revision to its full-year sales outlook.

The company reported Q1 net sales of $3.50 billion, missing the analyst consensus estimate of $3.52 billion. Comparable sales grew by 2%, falling short of the expected 3.06% increase. While adjusted earnings per share of $0.38 slightly beat estimates, investor focus shifted to the softened forward guidance.

Gap cut its fiscal 2026 net sales growth forecast to a range of 1% to 2%, down from its prior outlook of 2% to 3% growth and below analyst expectations. Furthermore, the company provided a weak Q2 outlook, expecting net sales to be flat to down 1% year-over-year versus estimates for a 2.12% increase. Management cited underperformance in the seasonal women's dress business at its largest brand, Old Navy, as a key factor, with the issue persisting into the current quarter. The guidance revision signals pressure from budget-conscious consumers pulling back on discretionary spending amid macroeconomic uncertainty.