Gap Forecast Trails Some Estimates as Old Navy Sales Decline
Gap, Target December Sales Trail Estimates
Jerome Favre/Bloomberg
Gap Inc. merchandise is displayed on shelves in the company's store in Hong Kong.
Gap Inc. merchandise is displayed on shelves in the company's store in Hong Kong. Photographer: Jerome Favre/Bloomberg
Feb. 24 (Bloomberg) -- Bloomberg's Hitha Prabhakar reports on Crocs Inc. disappointing investors with their first quarter outlook and Gap Inc. moving lower on a weak forecast. She speaks on Bloomberg Television's "InBusiness With Margaret Brennan." (Source: Bloomberg)
Gap Forecast Trails Some Estimates on Old Navy Sales
David Paul Morris/Bloomberg
A pedestrian carries a Gap Inc. Old Navy shopping bag in San Francisco.
A pedestrian carries a Gap Inc. Old Navy shopping bag in San Francisco. Photographer: David Paul Morris/Bloomberg
Gap Inc. (GPS), the largest U.S. apparel chain, forecast profit this year that was less than some analysts estimated as sales declined at its Old Navy stores.
Profit in the year ending in January 2013 will be $1.75 a share to $1.80 a share, San Francisco-based Gap said today in a statement. The average estimate of 31 analysts surveyed by Bloomberg was $1.80.
Chief Executive Officer Glenn Murphy failed to boost holiday sales at Old Navy after introducing a new marketing campaign for the more-than-1,000-store chain during the third quarter. The company yesterday said former Nike Inc. executive Jill Stanton will become creative adviser for Old Navy, which lost president Tom Wyatt last month.
“Old Navy is at the essence of the issue with Gap,” Craig Johnson, president of Customer Growth Partners in New Canaan, Connecticut, said in a telephone interview before results were announced. “They’ve made some cosmetic changes, but it’s going to have to be more radical to save the brand.”
Gap rose 0.3 percent to $23.60 at 4:11 p.m. in New York. The shares fell 16 percent last year.
Fourth-quarter net income fell 40 percent to $218 million, or 44 cents a share, from $365 million, or 60 cents, a year earlier, the company said. Analysts projected 42 cents, the average of 28 estimates compiled by Bloomberg.
Comparable-store sales at North American Old Navy locations and associated online sales fell 6 percent in the quarter, compared with a 4 percent decline for the company overall.
To contact the reporter on this story: Ashley Lutz in New York at alutz8@bloomberg.net
To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net
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