“Based on current projections, we would expect Gap brand to show sequential progress but still be down for the year,” Chief Financial Officer Teri List-Stoll said on a post-earnings call.
Chief Executive Officer Art Peck has also shut Gap brand stores and named a new head for the unit earlier this year in a bid to shore up sales.
Peck on the call said “early reads of fourth-quarter product flows are encouraging.”
“The problem is that the turnaround is taking a long time and it still is a significant misstep on their part,” said Gabriella Santaniello, founder of retail consultancy A line Partners.
Old Navy, Gap’s more affordable brand and a bright spot, also missed comparable sales estimates by a small margin.
Sales rose 4 percent, while analysts had expected a 4.65 percent increase. The brand has topped estimates in six of the past eight quarters.
Business casual clothing brand Banana Republic topped analysts’ estimates for same-store sales, posting a 2 percent rise compared with average estimate of 0.72 percent gain.
Overall company same-store sales were flat in the three months ended Nov. 3, missing analysts’ average estimate of a 1.09 percent rise.
Excluding items, Gap earned 69 cents per share, beating the average estimate by a cent.
Net sales rose 6.5 percent to $4.09 billion, slightly above the average estimate of $4 billion.
The company cut the top end of its full-year profit forecast to $2.60 per share from $2.70, retaining the lower end at $2.55.
Shares of the San Francisco-based company, which declined 3 percent in regular trading, dropped as much as 2 percent after the bell. They have fallen 27 percent so far this year.
Be the first to comment