Gap Inc.’s namesake brand reported a bigger-than-expected drop in quarterly same-store sales that outweighed revenue and profit beat and pushed the company’s shares down nearly 7 per cent in after-market trading on Thursday.
Sales at Gap brand stores open for more than a year fell 5 per cent, bigger than the 2.55 per cent fall anticipated by analysts, according to Thomson Reuters I/B/E/S.
Gap, which competes with fast-fashion brands including H&M and Forever 21, has been revamping its trends and styles to draw young shoppers to its stores.
The company’s Old Navy brand, which offers apparel at lower prices, again performed well. Same-store sales at the brand rose 5 per cent, topping analysts’ estimate of 4.5 per cent growth.
Net sales rose 7.5 per cent to $4.09 billion, beating analysts’ average estimate of $4.01 billion.
Excluding certain items, the company earned 76 cents a share, beating the average estimate of 72 cents.