Gap Reports Downbeat Profit Guidance, Drop in September Sales--Update
October 08 2015 - 10:01PM
Dow Jones News
By George Stahl
Gap Inc. said total sales in September fell 1%, hurt by the
stronger dollar and weakness at Banana Republic, and gave downbeat
guidance on the company's expected profitability in the current
quarter.
The retailer said it now expects its gross margin rate for the
third quarter to be similar to the second quarter. In the July
quarter, Gap had a gross margin of 37.4%; analysts were expecting
39.6% for the current quarter.
Shares of Gap, down 31% over the past 12 months, fell 5.9% to
$27.25 in after-hours trading.
Total sales for the five weeks ended Saturday was $1.46 billion,
down from $1.48 billion a year ago. On a constant-currency basis,
September sales rose 2% from a year ago.
Chief Financial Officer Sabrina Simmons called the month
"challenging" in the company's news release.
Excluding stores newly opened or closed, sales at Gap Inc.
stores slipped 1%, better than the 1.6% drop estimated by data
tracker RetailMetrics.
At the company's different brands, same-store sales were flat at
the namesake Gap stores, fell 10% at Banana Republic and rose 4% at
Old Navy.
RetailMetrics had projected same-store sales to fall 6.2% at
Gap's namesake stores, drop 5.6% at Banana Republic and rise 5.6%
at Old Navy. The firm noted that the Gap stores had their strongest
same-store sales result since April, while Banana Republic had its
third-straight double-digit percentage decline.
Write to George Stahl at george.stahl@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
October 08, 2015 21:46 ET (01:46 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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