Gap Inc. Shares Plunge 13% After Old Navy's Disappointing Sales Performance
Gap shares tumble 13% as retailer cuts sales guidance after disappointing Old Navy performance

Image: Cnbc
Gap Inc. reported disappointing sales from its largest brand, Old Navy, which grew just 1% in the fiscal first quarter, leading to a cut in the company's sales guidance. Despite this, Gap raised its earnings forecast, expecting adjusted earnings per share between $2.30 and $2.40.
- 01Old Navy's comparable sales fell short of expectations, growing only 1% against an anticipated 3%.
- 02Gap has revised its sales outlook, now projecting growth of 1% to 2%, down from 2% to 3%.
- 03The company's adjusted earnings per share forecast increased to between $2.30 and $2.40, up from $2.20 to $2.35.
- 04Gap's net income for the quarter was reported at $339 million, or 90 cents per share, compared to $193 million, or 51 cents per share, a year earlier.
- 05While Old Navy struggled, Gap's namesake brand saw a 10% increase in comparable sales, exceeding expectations.
Advertisement
In-Article Ad
Gap Inc. experienced a significant drop in its stock price, falling over 10% in after-hours trading, after announcing disappointing sales results from its largest brand, Old Navy. For the fiscal first quarter, Old Navy's comparable sales grew only 1%, falling short of the 3% growth analysts had anticipated. Consequently, Gap revised its sales guidance, now expecting companywide sales growth between 1% and 2%, down from a previous estimate of 2% to 3%. Despite the sales setback, Gap raised its adjusted earnings per share forecast to between $2.30 and $2.40, compared to the earlier range of $2.20 to $2.35. The company reported net income of $339 million, or 90 cents per share, a significant increase from $193 million, or 51 cents per share, in the same period last year. CEO Richard Dickson attributed the weak sales performance to a lack of appealing spring and summer products rather than broader economic issues. In contrast, Gap's own brand reported a strong 10% growth in comparable sales, highlighting a successful marketing strategy.
Advertisement
In-Article Ad
The drop in Gap's stock price could affect investor confidence and market perception of the brand.
Advertisement
In-Article Ad
Reader Poll
How do you feel about Gap Inc.'s future prospects after this earnings report?
Connecting to poll...
More about Gap Inc.
Read the original article
Visit the source for the complete story.






