Gap Inc. lowered its full‑year revenue outlook on Thursday, projecting a 1%‑2% increase after previously targeting 2%‑3% growth. Chief Executive Richard Dickson cited weaker performance at Old Navy, the chain that accounts for roughly half of the retailer’s sales. The adjustment also aligns Gap with broader retail slowdown seen after the pandemic.

Analysts note Old Navy’s slowdown stems from saturated discount‑apparel markets and tepid consumer spending, pressuring Gap’s overall topline. The company’s other brands, Banana Republic and Athleta, have shown modest gains but cannot offset the drag. The decline also reflects heightened competition from fast‑fashion rivals expanding their online footprint. Investors reacted sharply, with Gap shares tumbling 14% in after‑hours trading to $21.56 per share.

The cut trims Gap’s growth runway and raises questions about its ability to revive Old Navy’s market share. With inventory levels already high, the retailer may need to accelerate promotions or re‑tool its pricing strategy to protect margins. Management will monitor same‑store sales as Q4 approaches, seeking signs of a turnaround. For now, the revised outlook forces investors to reassess Gap’s valuation against peers in apparel.