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The Gap

GAP
66
Apparel - Retail · Consumer Cyclical
Also trades as: 0ITS.L GBP 0.22 (-3.04%)
Price
$22.55
-0.36 (-1.59%)
Market Cap
$7.92B
Winston Score
66
Winston is curious
A decent business — some strong pillars, some weaker.
Data as of Oct 23, 2026 · filings through Aug 1, 2026

§How the score breaks down

Quality
Good
19/30
Growth
Good
13/20
Cash Flow
Strong
8/10
Stability
Strong
7/10
Valuation
Good
6/10
Ownership
Good
10/15
Dividends
Good
3/5

66 of 100 counted points = Winston Score 66.

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§Winston Score History

The full picture

Gap Inc. is a clothing retailer that sells casual apparel, accessories, and personal care products. It owns four well-known brands: Gap, Old Navy, Banana Republic, and Athleta. The company sells to everyday shoppers across a wide range of ages and income levels, making it one of the largest specialty apparel retailers in the United States.

Gap makes money by selling clothes through its own stores and its websites. It operates thousands of locations mostly in North America, with some international presence through franchise partners. Old Navy is the largest and most profitable brand, which means the whole company leans heavily on that one brand performing well. The main risk Gap faces is intense competition from fast-fashion retailers like H&M and Zara, as well as online players like Amazon and Shein, which can undercut Gap on price and speed. Stabilizing Banana Republic and growing Athleta in the activewear market are the key growth opportunities being pursued.

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Growth Profile

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

-2.0% YoY

YoY Growth Rate

Revenue declining

Reported EPS Growth

+143.1% YoY

Quarterly reporting periods ended:

2 Aug 2025: $0.58

1 Aug 2026: $1.41

Reported/statutory EPS, not adjusted or underlying earnings. One-off items can affect this figure. Provider rounding can affect the growth rate.

YoY Growth Rate

Reported EPS increased year over year

R&D Spend

$0/ year

0.0% of revenue

Below sector average (4%)

Research and development spending

Insider Activity

36.7%ownership

→ Flat

Insider ownership roughly steady over the past year

Cash Position

Cash flow positive

$2.5B cash & investments

Quarterly Free Cash Flow

↓ Burn rate worsening

Company generates more cash than it spends — no dilution risk from fundraising

Revenue declining

The Gap's revenue is actually shrinking. In a growth stock, that removes the core investment thesis. The low Winston Score here may be warranted — unless there's a turnaround story.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Share count broadly stable

+0.3% over 4y

The share count has stayed roughly flat over this period — little dilution or buyback activity.

Diluted shares outstanding: 383.0M (2022) → 384.0M (2026)

Score breakdown

Every number that matters to educated investors.

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Quality

Profit per sale
Gross Margin
52.8%
Healthy — 52.8% gross margin
Profit after running costs
Operating Margin
18.5%
Healthy — 18.5% operating margin
Return on the money invested
ROCE
17.4%
Strong — 17.4% return on capital

ROIC between 15% and 25%. Every dollar invested in the business earns 15 to 25 cents back per year.

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Growth

Sales growth
Sales YoY
+1.1%
Nearly flat sales (+1.1% YoY)
Profit growth
EPS YoY
+45.5%
Earnings growing fast (+45.5% YoY)

Earnings growing 25%+ a year. The compounder zone.

How steady the profit is
EPS Consistency
6/8 quarters
Earnings grew in most of the last 8 quarters

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Cash Flow

Profit that turns into cash
Cash Conversion
147%
Turns 147% of profit into real cash
Spare cash per sale
FCF Margin
7.2%
Modest free cash flow (7.2%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

What it owes vs what it owns
Debt / Equity
1.45
Elevated debt (1.45)
Covers its interest
Interest Cover
24.41x
Comfortably covers interest (24.4x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

Price vs profit
P/E Ratio (TTM)
6.6x
Attractive valuation — P/E 6.6

P/E under 10. The price tag is small relative to last year's profit.

Cheaper or dearer next year
P/E vs Forward
-3.0
SLOWING
Earnings expected to fall — forward P/E higher than today

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Dividends

Dividend
Dividend Yield
3.07%
Moderate income — 3.07% yield

Standard yield zone for stable dividend payers. A meaningful piece of total return.

Dividend record
Dividend Growth
+7.0%
Dividend growing modestly (7.0% YoY)
Payout Ratio
20%
no trend
Pays out a modest share of profit and keeps the rest to reinvest. Room to keep paying through a weak year.

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