Gap Inc. (NYSE: GAP) reported mixed first-quarter results, missing earnings and revenue expectations for the second consecutive quarter and lowering its full-year sales outlook due to disappointing performance at its Old Navy brand. The company posted adjusted diluted earnings per share (EPS) of 38 cents, a decline from 51 cents a year ago, while revenue increased 1% year over year to $3.5 billion but fell short of analyst estimates. Shares plummeted about 17% in after-hours trading as investors reacted to the weaker top-line growth.
The disappointing results prompted Gap to revise its sales guidance down to a 1% to 2% year-over-year increase, compared to the previous estimate of 2% to 3%. Despite raising its EPS forecast to $2.30 to $2.40 per share, the market’s focus remained on the challenges at Old Navy and the ongoing struggles at Athleta, overshadowing the positive performance of the Gap brand and Banana Republic.
Moving forward, market professionals should monitor whether the issues at Old Navy are short-lived and if Athleta’s turnaround efforts can gain momentum, as these factors will be critical in determining Gap’s ability to stabilize and grow in a competitive retail landscape.
Source: marketbeat.com