The Gap, Inc.
GAP Consumer Cyclical Apparel Retail
The Gap, Inc.’s revenue for fiscal 2026 (year ended January 2026) was $15.4 billion, up 1.86% from fiscal 2025. In the quarter to July 2026, revenue fell 1.99%, EPS grew 143.1%, free cash flow fell 47.7% and total debt fell 29.6%, each against the same quarter a year earlier. Dividend growth for five consecutive years.
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The Gap, Inc. (GAP) Altman Z-score
The Gap, Inc.'s Altman Z-score for fiscal 2026 is 2.85, in the grey zone (1.81–2.99).
Altman Z-score, annual
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Annual newest first
| Period | Altman Z-score | Change (points) |
|---|---|---|
| FY2026 | 2.85 | 0.09 |
| FY2025 | 2.76 | 0.31 |
| FY2024 | 2.45 | 0.37 |
| FY2023 | 2.08 | (0.23) |
| FY2022 | 2.31 | 0.67 |
| FY2021 | 1.64 | (0.52) |
| FY2020 | 2.16 | (2.68) |
| FY2019 | 4.84 | (0.23) |
| FY2018 | 5.07 | 0.54 |
| FY2017 | 4.53 | (0.19) |
How fiscal 2026’s score is made up
| Component | This year | Year before | Result | Points |
|---|---|---|---|---|
| Working capital / total assets | 0.20 | — | 0.24 | |
| Retained earnings / total assets | 0.29 | — | 0.40 | |
| EBIT / total assets | 0.09 | — | 0.29 | |
| Market value of equity / total liabilities | 1.18 | — | 0.71 | |
| Sales / total assets | 1.22 | — | 1.22 | |
| Altman Z-score | Grey zone | 2.85 | ||
| Z″ Variant for non-manufacturing and asset-light companies (drops the sales/assets term, uses book equity) | Safe zone | 3.26 | ||
Z and Z″ put The Gap, Inc. in different zones: grey zone by Z, safe zone by Z″.
How the Altman Z-score works
Z = 1.2 × working capital ÷ total assets + 1.4 × retained earnings ÷ total assets + 3.3 × EBIT ÷ total assets + 0.6 × market value of equity ÷ total liabilities + 1.0 × revenue ÷ total assets (Altman, 1968). The market value of equity is the close on the last trading day of the fiscal year times weighted basic shares.
Z″ = 6.56 × working capital ÷ total assets + 3.26 × retained earnings ÷ total assets + 6.72 × EBIT ÷ total assets + 1.05 × book equity ÷ total liabilities (Altman, Hartzell and Peck, 1995), the variant for non-manufacturing and asset-light companies.
| Zone | Z | Z″ |
|---|---|---|
| Safe zone | above 2.99 | above 2.60 |
| Grey zone | 1.81–2.99 | 1.10–2.60 |
| Distress zone | below 1.81 | below 1.10 |
Not worked out for banks, insurers and REITs, whose balance sheets the model does not describe, nor when a figure is missing or there is no share price in the week to the fiscal year end.
Altman Z-score against peers
| Company | Altman Z-score |
|---|---|
| LULU lululemon athletica inc. compare | 6.8× |
| BKE Buckle, Inc. (The) compare | 5.2× |
| ANF Abercrombie & Fitch Company compare | 5.1× |
| BOOT Boot Barn Holdings, Inc. compare | 4.7× |
| URBN Urban Outfitters, Inc. compare | 4.3× |
| AEO American Eagle Outfitters, Inc. compare | 3.6× |
| BURL Burlington Stores, Inc. compare | 3.2× |
| GAP The Gap, Inc. | 2.9× |
| VSXY Victoria's Secret & Co. compare | 2.4× |
What Altman Z-score is
The Altman Z-Score weighs working capital, retained earnings, operating profit, market value and sales against assets and debts to gauge the risk of distress.
1.2 × working capital ÷ total assets + 1.4 × retained earnings ÷ total assets + 3.3 × EBIT ÷ total assets + 0.6 × market value of equity ÷ total liabilities + 1.0 × revenue ÷ total assets