Art Peck, President and CEO of Gap Inc.
David Paul Morris | Bloomberg | Getty Images
Gap Inc. shares tipped Thursday after the clothing retailer reported quarterly earnings and sales cards of Wall Street estimates and slashed its full-year earnings outlook.
The clothing dealer's stock crammed more than 10% hours of trading, having closed the day with a fresh low of $ 20.60, a level not seen since June 201[ads1]6.
Here's what Gap reported for its first quarter relative to what analysts expected, based on refinitive data:
- Earnings per share, adjusted: 24 cents vs 32 cents expected
- Revenue: $ 3.71 billion vs. 3.77 billion expected
- Same store sales : down 4% against 1.1% fall expected
Gap over the last quarter earned $ 227 million, or 60 cents per share, compared to $ 164 million, or 42 cents per share, a year ago. Excluding one-off fees, it achieved 24 cents per share, missing analysts' estimates for 32 cents.
Sales fell to $ 3.71 billion from $ 3.78 billion a year ago, with no estimates of $ 3.77 billion.
CEO Art Peck in the last quarter "extremely challenging" and said he was not "happy" with the results. "We are committed to improving performance and performance this year," he said.
Same store sales at Gap's name brands were down 10% compared to a 4% decline a year ago. The same store sales at Old Navy – usually the brightest spot at Gap Inc. – were down 1%, compared to a 3% increase a year ago. Banana Republic's same store sales were down 3%, compared to 3% growth in the same quarter of 2018.
San Francisco-based dealers cut their annual profit outlook and now expect adjusted earnings per share to fall within a $ 2.05 range. $ 2.15 this year, compared to a previous range of $ 2.40 to $ 2.55. It also forecasts the company's broad same store sales to be down low single digit fiscal 2019.
Gap also said Thursday plans to close 130 Gap-branded stores in the fourth quarter, part of a previously announced pruning of the nameake brand is real estate. It's still focused on opening stores, but under its Old Navy banner, its women's athleisure business, Athleta and the Gap brand in China.
The disappointing Gap report comes as a number of clothing retailers ranging from Canada Goose to Abercrombie & Fitch to J.Jill has reported poor earnings this week, pulling down the S & P 500 Retail ETF (XRT). The stock index has fallen more than 11% so far this month. Gap shares are down to around 20% so far this year.
The Gap shares had increased more than 20% on February 28, when the dealer announced plans to spin out his Old Navy brand in his own public company, leaving Gap's other brands, including his namesake one, in a new one. still non-named holding company. This deal is not expected to be completed by 2020.
Peck on Thursday said the dealer still "remains [s] confident in our plan to divide into two independent publicly traded public companies."