Winter Storms Disrupt Holiday Sales, Weigh on Gap and Old Navy Earnings

Gap Inc. reported a decline in holiday quarter performance as severe winter storms forced the temporary closure of 800 stores across the U.S., disrupting operations and limiting customer access during peak shopping periods. The closures, concentrated in the Northeast and Midwest, impacted both the Gap and Old Navy brands, leading to a 12% drop in same-store sales for the quarter—well below analyst projections. The company cited supply chain delays and reduced in-store traffic as key factors in the shortfall. Despite a 4% year-over-year increase in online sales, the offline sales gap proved difficult to offset, particularly in regions where snow accumulation and power outages persisted for several days. Gap Inc. now expects full-year 2026 adjusted earnings per share to fall within a range of $2.85 to $2.95, down from prior guidance of $3.00 to $3.10. The results affected broader sector sentiment, with consumer discretionary exchange-traded funds such as XLY and VUG seeing modest sell-offs in the days following the report. The performance of Gap (GPS) and Old Navy further highlighted vulnerabilities in the apparel retail sector to extreme weather events. Investors reacted with concern, sending GPS shares down 7% in after-hours trading. Retail analysts noted the situation underscores the growing need for adaptive inventory and logistics planning, especially as climate extremes become more frequent. The disruptions may also influence future capital allocation toward e-commerce infrastructure and weather-resilient supply chains.