Gap's shares plummet after sales continue to slide
NEW YORK (AP) — Gap Inc.'s shares are falling nearly 9 percent in after-hours trading Thursday, after the clothing retailer announced March results that show its continued sales funk.
It also warned that it was entering into April with higher levels of inventory, which it said could hurt profit margins.
The ailing retailer, based in San Francisco, California, said late Thursday that its revenue at stores open at least a year fell 6 percent as all three key brands— Banana Republic, Old Navy and its namesake label — suffered sales drops. Analysts were expecting a smaller 4.3 percent decline.
By division, Gap's revenue at stores open at least a year fell 3 percent, while Banana Republic's key sales metric fell 14 percent and Old Navy saw a 6 percent drop.
The company said that total sales fell 6.5 percent to $1.43 billion for the five-week period ended April 2.
The weak performance underscores the challenges for Gap's CEO Art Peck who assumed the helm in February 2015 and is trying to turn around the business.