The shares lost 9% in the first hour of trading after reporting third quarter results after closing ended yesterday.
Total revenue of US$3.8bn was ahead of market expectations of US$3.74bn but like-for-like sales (LFL) were down 3% year-on-year, once the effects of the Fishkill distribution center fire were stripped out.
The Gap stores saw LFL sales plunge 8%, including a four percentage point impact from the Fishkill fire. LFL sales at banana Republic were also down 8^ (-6% adjusted for Fishkill) but old Navy managed to increase LFL sales by 3%, despite an estimated one percentage hit from the distribution center fire.
Net income fell to US$204mln from US$248mln the year before. Adjusted earnings per share of 60 cents were in line with expectations.
“I’m pleased to see improved product across our brands, as well as areas of healthier merchandise margins, even against the backdrop of challenging traffic trends during the quarter,” said Art Peck, chief executive officer of Gap.
“Looking forward, we remain dedicated to utilizing our scale advantage in supply chain, as well as through knowledge sharing, in order to drive product innovation across brands and categories,” Peck said.
Story by ProactiveInvestors