- 3 Small-Cap Stocks We’re Skeptical Of
May 17, 2026
Many small-cap stocks have limited Wall Street coverage, giving savvy investors the chance to act before everyone else catches on. But the flip side is that these businesses have increased downside risk because they lack the scale and staying power of their larger competitors.
The downside that can come from buying these securities is precisely why we started StockStory - to isolate the long-term winners from the losers so you can invest with confidence. That said, here are three small-cap stocks to avoid and some other investments you should consider instead.
Impinj (PI)
Market Cap: $4.52 billion
Founded by Caltech professor Carver Mead and one of his students Chris Diorio, Impinj (NASDAQ:PI) is a maker of radio-frequency identification (RFID) hardware and software.
Why Is PI Not Exciting?
Anticipated sales growth of 9.3% for the next year implies demand will be shaky Historical operating margin losses point to an inefficient cost structure Negative returns on capital show that some of its growth strategies have backfired
At $147.78 per share, Impinj trades at 72.5x forward P/E. To fully understand why you should be careful with PI, check out our full research report (it’s free).
Gap (GAP)
Market Cap: $7.82 billion
Operating under the Gap, Old Navy, Banana Republic, and Athleta brands, Gap (NYSE:GAP) is an apparel and accessories retailer selling casual clothing to men, women, and children.
Why Does GAP Give Us Pause?
Sales were flat over the last three years, indicating it’s failed to expand its business Conservative approach to adding new stores shows management is focused on improving existing location performance Underwhelming 7.6% return on capital reflects management’s difficulties in finding profitable growth opportunities
Gap is trading at $21.58 per share, or 9.4x forward P/E. Read our free research report to see why you should think twice about including GAP in your portfolio, it’s free.
CoreCivic (CXW)
Market Cap: $1.94 billion
Originally founded in 1983 as the first private prison company in the United States, CoreCivic (NYSE:CXW) operates correctional facilities, detention centers, and residential reentry programs for government agencies across the United States.
Why Are We Hesitant About CXW?
Muted 4.6% annual revenue growth over the last five years shows its demand lagged behind its business services peers Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 3.2 percentage points Free cash flow margin shrank by 6.6 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
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CoreCivic’s stock price of $19.66 implies a valuation ratio of 0.8x forward price-to-sales. Check out our free in-depth research report to learn more about why CXW doesn’t pass our bar.
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- Mall retail giant closes final store in key city after 26 years
May 16, 2026
For decades, one familiar mall retailer helped define everyday American style. It became a go-to destination for wardrobe basics, denim jeans, and iconic khakis that generations of shoppers viewed as dependable and affordable.
But as consumer habits rapidly shift toward digital shopping and experience-driven retail, even some of the most recognizable legacy brands are being forced to rethink how and where they operate.
The company has spent the last several years shrinking its global footprint, closing hundreds of locations while investing heavily in store redesigns, digital expansion, and supply chain modernization.
The strategy reflects a broader transformation unfolding across the retail industry, where brands are balancing cost-cutting efforts with the need to modernize customer experiences.
Founded in 1969 in San Francisco, California, Gap Inc. (GAP) grew into one of the most iconic clothing retailers in the U.S. Today, the company operates four major brands, including Gap, Old Navy, Banana Republic, and Athleta, and manages approximately 2,474 company-operated stores alongside about 1,000 franchise locations globally as of Jan. 31, 2026, according to its latest SEC filing.
Gap confirms closure of its last remaining Oakland store
Gap Inc. is closing its final remaining store in Oakland, California, after nearly 26 years in business, marking the retailer's complete exit from the city.
The location at 3277 Lakeshore Avenue is expected to close when its lease expires in summer 2026. It became Oakland's last Gap store after the retailer shuttered its Broadway location in 2008.
This closure leaves shoppers in the East Bay with fewer options, as the closest nearby Gap store is now more than 10 miles away at 2 Folsom Street in San Francisco, according to the company's store locator.
Gap has not publicly disclosed a specific reason for the shutdown or the number of employees affected. However, workers will have opportunities to transfer to nearby locations, according to ABC7 News.
The move also reflects a broader trend affecting many long-established retailers as companies reassess underperforming locations and shift investment toward higher-performing stores and digital operations.
Gap continues closing stores while investing in growth
The Oakland closure comes as Gap continues reshaping its retail footprint despite posting stronger financial results.
Gap closed 32 stores during 2025 and expects net closures in 2026 to remain roughly flat, according to the company's fourth-quarter and fiscal-year 2025 earnings report.
At the same time, the retailer is heavily investing in newer store concepts designed to modernize the customer experience. Gap says these updated formats continue to outperform older locations across its fleet, prompting it to accelerate expansion of the new models in 2026.
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Gap's fiscal year 2025 earnings results showed continued momentum:
Net sales: Increased 2% year over year Comparable sales: Rose 3% Online sales: Climbed 4%, accounting for 39% of total net sales
Most of the company's brands also posted growth. Gap delivered the strongest gains, up 7%, while Athleta was the only brand to report declines, down 10%.
"The execution of our playbook is driving consistent results, as we achieved our second consecutive year of topline growth and eighth consecutive quarter of positive comparable sales," Gap Inc. CEO Richard Dickson said in a statement.
"Financial and operational rigor combined with the strength of our platform drove one of our highest gross margins in the last 25 years and further strengthened our balance sheet."
During Gap's March 2026 earnings call, Dickson said the company had completed the "first chapter" of its transformation strategy. As the retailer moves into its next phase, it plans to prioritize healthy gross margins, disciplined expense management, sustained profitability, and strong cash reserves.
Gap also expects to invest approximately $650 million in 2026, primarily in stores, technology, and supply-chain operations.
Retail analysts say many apparel companies are now prioritizing fewer but more productive stores, especially as rising operating costs and changing consumer behavior pressure traditional retail models.
"The problem, in many cases, is not that stores exist. It is that too many stores exist in formats that are no longer worth the trip," said a2b Fulfillment VP of Marketing Sarah Smith.Gap closes its final remaining store in Oakland, California.JIM WATSON/Getty Images
Why physical stores still matter in modern retail
Gap's decision to streamline its store fleet reflects broader structural shifts reshaping the retail industry.
According to CoreSight Research, retailers confirmed 67% more store closures in 2025 compared to the previous year, highlighting mounting economic pressure and evolving consumer shopping habits.
At the same time, analysts expect continued volatility across the fashion and retail sectors. McKinsey & Company's State of Fashion 2026 Report projects low-single-digit growth for the global fashion industry, citing persistent macroeconomic uncertainty, tariff pressures, and increasingly value-conscious consumers, particularly in the U.S.
E-commerce is also gaining market share rapidly. U.S. online spending reached $1.34 trillion in 2024 and is projected to surpass $2.5 trillion by 2030, according to Capital One Shopping.
Despite the quick rise of online shopping, physical retail still accounts for the majority of sales. Global retail sales reached approximately $18.9 trillion in 2025, with around $14.4 trillion still generated through brick-and-mortar stores, according to Euromonitor research gathered by EY.
Industry experts say stores remain critical because they continue to drive profitability, brand visibility, fulfillment efficiency, and customer engagement.
"It's clear that the physical store still plays an important role," said EY Global Retail Leader Malin Andrée and Consumer Senior Analyst Jon Copestake. "Not only do stores have plenty of runway left in delivering revenue, but they also have opportunities to drive new growth and alternative revenue streams and, by working in tandem with digital channels, they can maximize returns on investment."
The contrast highlights that stores remain essential but must evolve to justify their existence beyond product sales.
What Gap's restructuring reveals about the future of retail
Gap's restructuring reflects a broader transformation across the retail industry.
Legacy brands are no longer competing solely on product selection or brand recognition. They are increasingly being forced to rethink their entire operating model as consumer expectations evolve and digital competition intensifies.
Similar restructuring efforts have also been underway across major brands. Here's some of my previous coverage of retail closures:
72-year-old mall retailer to close more stores in 2026 Fashion brand shuts down website, all stores may close 115-year-old fashion brand exits entire market in 2026
Many retailers are shifting toward more flexible, asset-light strategies that reduce reliance on expensive physical infrastructure while expanding digital capabilities and partnership-driven distribution models.
According to Forrester, many retailers have struggled to modernize in-store experiences quickly enough to match the convenience, personalization, and speed customers now expect online.
Retail analysts say long-term success will depend on balancing operational efficiency with innovation and customer experience.
Retailers must continue experimenting with hybrid strategies that connect digital and physical shopping experiences, explained Sharmila C. Chatterjee, marketing lecturer at MIT Sloan School of Management.
"The future of retail is a hybrid of online and offline channels," said Chatterjee in a study. "To keep customers coming back, retailers need to make strategic investments, experiment with new approaches, and, inevitably, engage in some trial and error as they figure it out."
Related: Pepsi drops 5 limited-edition soda flavors Coca-Cola doesn’t have
This story was originally published by TheStreet on May 16, 2026, where it first appeared in the Retail section. Add TheStreet as a Preferred Source by clicking here.
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- Anthropologie Promotes Anu Narayanan to Global President, Women’s, Home and Retail
May 15, 2026
Anu Narayanan has been promoted to global president, Anthropologie women’s, home and retail, expanding her leadership across global merchandising and retail stores for Anthropologie.
Most recently she was president of women’s and home at Anthropologie, which she became in 2023. Before that she was Anthropologie’s chief merchandising officer of apparel and accessories, where under her leadership her teams delivered historical highs across sales and customer acquisition.
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Earlier in her career Narayanan was senior vice president and general merchandise manager, merchandising and design at La Senza, prior to which she was vice president, general manager of women’s at Old Navy. She has also held roles at Avenue Stores, Ann Taylor, Gap Inc. and Talbots.
According to the company, since joining Anthropologie, Narayanan has been instrumental in driving the retailer’s growth and evolution. Her leadership has helped shape and accelerate the brand’s strategic priorities, while elevating and expanding its portfolio of owned brands. She has been instrumental in transforming Anthropologie into a lifestyle brand, broadening categories, increasing speed to market, and deepening connection with customers.
“Anu’s leadership reflects a rare combination of creative intuition, deep customer understanding, and merchant discipline that continues to drive our business forward,” said Tricia Smith, global chief executive officer of Anthropologie Group. “I’m incredibly excited for this next chapter for Anu and confident her leadership will continue to elevate Anthropologie globally.”
Narayanan reports to Smith.
For the year ended Jan. 31, Anthropologie parent Urban Outfitters’ net sales increased 11.1 percent to a record $6.17 billion, while retail segment net sales increased 5.9 percent at Anthropologie, 7.3 percent at Urban Outfitters and 4.8 percent at Free People.
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- A Look At Gap’s (GAP) Valuation As Shares Trade Below Narrative Fair Value
May 15, 2026
Never miss an important update on your stock portfolio and cut through the noise. Over 7 million investors trust Simply Wall St to stay informed where it matters for FREE.
Recent performance snapshot
Gap (GAP) has drawn investor attention after a mixed run in its stock, with the price at $21.23 following a 1% gain on the day, but declines over the past week and month.
See our latest analysis for Gap.
That recent 1-day share price gain sits against a weaker backdrop, with the stock down over the past month and quarter, while the 3-year total shareholder return is very strong compared with the 1-year total shareholder return decline of 17.36%.
If Gap’s recent swings have you thinking about where else opportunity might be building, this could be a good moment to check out 19 top founder-led companies
With Gap shares down over the past year but trading at a discount to analyst targets and some valuation models, the real question is whether this gap points to a buying opportunity or if the market already prices in future growth.
Most Popular Narrative: 31% Undervalued
With Gap shares at $21.23 against a narrative fair value of $30.65, the current price sits well below what this widely followed model suggests.
Gap's accessible price positioning and demonstrated value focus, seen in Old Navy's consistent category leadership and strong execution in core categories like denim and active, positions the company to benefit from the ongoing shift toward value-conscious consumer behavior, supporting stable demand and revenue growth.
Read the complete narrative.
Want to see what sits underneath that valuation gap? The narrative focuses on steady revenue expansion, firmer profit margins, and a future earnings multiple that assumes investors continue to reward this earnings profile. It also examines which earnings and margin assumptions have the biggest impact on that $30.65 figure.
Result: Fair Value of $30.65 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, that story can unravel quickly if Athleta's reset drags on, or if tariffs and higher input costs keep chipping away at margins and earnings power.
Find out about the key risks to this Gap narrative.
Next Steps
If this mix of risks and rewards feels finely balanced, do not wait on others to decide what it means for you. Review the full picture through 4 key rewards and 2 important warning signs
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Do not stop at a single stock when there are plenty of other opportunities that might fit your goals. Use the Simply Wall Street Screener to see what you might be missing.
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Target robust value potential by scanning a curated set of 47 high quality undervalued stocks that combine quality fundamentals with lower prices. Prioritise resilience by reviewing 67 resilient stocks with low risk scores that score well on stability and financial strength. Spot potential future standouts early by checking the screener containing 22 high quality undiscovered gems that many investors may not be watching yet.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include GAP.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
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- Boot Barn (BOOT) Q4 Earnings and Revenues Top Estimates
May 14, 2026
Boot Barn (BOOT) came out with quarterly earnings of $1.45 per share, beating the Zacks Consensus Estimate of $1.43 per share. This compares to earnings of $1.22 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of +1.40%. A quarter ago, it was expected that this Western apparel and footwear retailer would post earnings of $2.79 per share when it actually produced earnings of $2.79, delivering no surprise.
Over the last four quarters, the company has surpassed consensus EPS estimates three times.
Boot Barn, which belongs to the Zacks Retail - Apparel and Shoes industry, posted revenues of $538.75 million for the quarter ended March 2026, surpassing the Zacks Consensus Estimate by 1.13%. This compares to year-ago revenues of $453.75 million. The company has topped consensus revenue estimates three times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Boot Barn shares have lost about 17.7% since the beginning of the year versus the S&P 500's gain of 8.8%.
What's Next for Boot Barn?
While Boot Barn has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Boot Barn was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.95 on $577.9 million in revenues for the coming quarter and $8.54 on $2.57 billion in revenues for the current fiscal year.
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Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Retail - Apparel and Shoes is currently in the bottom 37% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
One other stock from the same industry, Gap (GAP), is yet to report results for the quarter ended April 2026. The results are expected to be released on May 28.
This clothing chain is expected to post quarterly earnings of $0.39 per share in its upcoming report, which represents a year-over-year change of -23.5%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
Gap's revenues are expected to be $3.53 billion, up 1.8% from the year-ago quarter.
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This article originally published on Zacks Investment Research (zacks.com).
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- Gap, Ollie's, Petco, and Five Below Shares Are Falling, What You Need To Know
May 14, 2026
What Happened?
A number of stocks fell in the afternoon session after markets raised concerns that surging gas prices would squeeze household budgets, potentially leading to a pullback in discretionary spending.
With gas prices climbing to their highest levels since 2022, the day-to-day cost of living became a significant issue for many consumers, particularly lower- and middle-income families. This pressure on household finances could force a reduction in spending on non-essential items, creating a headwind for the retail sector.
Also, University of Michigan consumer sentiment hit 47.6 in April, the lowest reading in the survey's 74-year history, below Great Recession and pandemic lows. Sentiment at 47.6 signals that households are already under stress.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
Apparel Retailer company Gap (NYSE:GAP) fell 7.8%. Is now the time to buy Gap? Access our full analysis report here, it’s free. Discount Retailer company Ollie's (NASDAQ:OLLI) fell 8.7%. Is now the time to buy Ollie's? Access our full analysis report here, it’s free. Specialty Retail company Petco (NASDAQ:WOOF) fell 9.2%. Is now the time to buy Petco? Access our full analysis report here, it’s free. Discount Retailer company Five Below (NASDAQ:FIVE) fell 6.9%. Is now the time to buy Five Below? Access our full analysis report here, it’s free.
Zooming In On Petco (WOOF)
Petco’s shares are extremely volatile and have had 39 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 25 days ago when the stock gained 3.3% on the news that RBC Capital reaffirmed its 'Outperform' rating on the stock and expressed increased confidence in the company's turnaround efforts.
The investment firm's positive stance came after hosting virtual meetings with Petco's leadership team, including its CEO and CFO.
Following the discussions, RBC Capital stated it walked away with greater conviction in the company's turnaround strategy and its financial model. The firm maintained its $4.00 price target and noted that it believed both Petco's financial numbers and its stock valuation had room to move higher.
Petco is down 10.4% since the beginning of the year, and at $2.56 per share, it is trading 41.4% below its 52-week high of $4.36 from July 2025. Investors who bought $1,000 worth of Petco’s shares 5 years ago would now be looking at only $104.67.
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- Gap's last Oakland store is set to close this summer
May 13, 2026 · nypost.com
Oakland residents will have one less place to buy khakis and hoodies this summer, with a major retailer pulling up stakes in the Bay Area metropolis.
- Gap Inc. Announces Second Quarter Dividend
May 12, 2026
SAN FRANCISCO, May 12, 2026 /PRNewswire/ -- Gap Inc. (NYSE: GAP) today announced that its board of directors has authorized a second quarter fiscal year 2026 dividend of $0.175 per share, payable on or after July 29, 2026, to shareholders of record at the close of business on July 8, 2026.
About Gap Inc. Gap Inc., a purpose-driven house of iconic brands, is the largest specialty apparel company in America. Its Old Navy, Gap, Banana Republic, and Athleta brands offer clothing, accessories, and lifestyle products for men, women and children available worldwide through company-operated and franchise stores, and e-commerce sites. Since 1969, Gap Inc. has created products and experiences that shape culture, while doing right by employees, communities and the planet through its commitment to bridge gaps to create a better world. For more information, please visit www.gapinc.com.
Investor Relations Contact: Shirley Martin
Investor_relations@gap.com
Media Relations Contact: Press@gap.comGap Inc. Logo (PRNewsfoto/Gap Inc.)Cision
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- Ebay is right to flip the bird at media-hungry GameStop overlord Ryan Cohen
May 12, 2026
Ryan Cohen (aka RC on X, per his legion of followers) suffered his latest setback on Tuesday.
Online marketplace eBay (EBAY) — chaired by former Gap (GAP) CEO and Disney (DIS) exec Paul Pressler — has rejected Cohen’s $55 billion deal to buy the company.
The company called the unsolicited offer “neither credible nor attractive.”
What, you honestly thought eBay would accept Cohen’s bid, if you can even call it a bid?
You thought eBay’s board would invite him into their San Jose, Calif., headquarters, put out a cheese board and sparkling water, and open their books?
The thought of this happening was absurd as soon as the play crossed the breaking news wires several weeks ago!
This is not the first time I took issue with Cohen.
In August 2022, I implored Bed Bath & Beyond investors not to believe that then-shareholder Cohen wanted to bring great things to the chain. He later dumped all his stock, and today the company remains on life support in some form.
In June 2023, I issued an open letter to Cohen inviting him to debate me on Yahoo Finance about what he planned to do with GameStop (GME). The lack of disclosures has continued, and so have the retailer’s dreadful financial results.
Cohen never took me up on my challenge.
The reality is Ryan Cohen is no aspiring Warren Buffett (as his fans think), and his play for eBay has likely been a media-grabbing joke designed to get him a few headlines.
There was no reason at all for eBay to consider this.
For one, eBay has shown good top- and bottom-line progress under CEO Jamie Iannone. GameStop’s sales have continued to dwindle.
Two, eBay’s stock is up 56% in the past year, while GameStop’s is down 16%. Since Cohen was named GameStop executive chair in June 2023, shares are down slightly — the S&P 500 (^GSPC) is up 71%.
And three, this would have been a high-leveraged deal that probably would have put the combined GameStop and eBay into junk rating territory. What combined company wants to start their time together viewed as junk by creditors?
“It [the deal] really didn’t [pass the sniff test],” B. Riley chief market strategist Art Hogan said on Yahoo Finance’s Opening Bid (video above). “Sometimes you look at deals and say, well, maybe this could make sense. There was no way to get there on this particular deal. It felt like someone wanted to tie together two rocks to see if they would float. And clearly there was no way to get this financing through.”
So in the wake of what looks to be a failed eBay play, I re-up this one to Ryan Cohen.
Ryan, I challenge you again to come on my show and debate me for one hour, no commercials, about GameStop and this eBay bid. I want to go line by line on your plan for GameStop for the next decade. I then want to go line by line through your plan for eBay and the funding plan.
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And you could sit there and stumble around and give lame, preplanned answers. I’ll let you do it. I want your supporters to see what and who they are invested in.
Brian Sozzi is Yahoo Finance's Executive Editor and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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- Gap Inc. Announces Second Quarter Dividend
May 12, 2026 · prnewswire.com
SAN FRANCISCO, May 12, 2026 /PRNewswire/ -- Gap Inc . (NYSE: GAP) today announced that its board of directors has authorized a second quarter fiscal year 2026 dividend of $0.175 per share, payable on or after July 29, 2026, to shareholders of record at the close of business on July 8, 2026.