Gap's Shares Drop After Shrinking Sales Hurt Profit Outlookby
Gap Inc. fell as much as 6.1 percent after declining sales at its namesake chain and Banana Republic hurt third-quarter earnings.
Profit was 62 cents to 63 cents a share in the three months through October, excluding some items, the San Francisco-based company said Monday in a preliminary earnings statement. Analysts estimated 67 cents, on average. The company plans to report full third-quarter results on Nov 19.
Chief Executive Officer Art Peck has been working to revive sales at the struggling Banana Republic and Gap chains. He’s named new presidents to head the two units, and last month the company announced that Banana Republic’s Marissa Webb, who served as creative director, would step down from her day-to-day roles. The retailer’s value-focused Old Navy brand, which had been fueling the company’s results, lost president Stefan Larsson last month to Ralph Lauren Corp., where he’s now CEO.
Gap and Banana Republic’s woes continued last quarter. Comparable sales fell 12 percent at Banana Republic and 4 percent at Gap, the company said Monday. Old Navy’s sales rose 4 percent.
The shares tumbled as low as $26 in New York, the biggest intraday decline in more than a month. Gap already had fallen 34 percent this year through the close on Monday.