Gap CEO focused on future with Q3 over

A steep profit decline and deteriorating sales at two of Gap Inc.’s three flagship formats in the third quarter have CEO Art Peck looking ahead to what he expects to be better times.

Gap Inc.’s total sales declined 3% to $3.86 billion compared to $3.97 billion last year, but excluding the effects of the stronger dollar total sales were flat. As has been the case lately, Old Navy turned in the best same store sales with a 4% comp increase on top of a 1% comp increase the prior year. The worst performing division was Banana Republic where comps declined 12% versus being flat the prior year. The Gap stores also produced negative comps, down 4% on top of a 5% prior year decline.

“With a challenging third quarter behind us, we are sharply focused on holiday execution across all channels. We are driving forward on our key strategies designed to fuel future growth.” said Gap Inc. CEO Art Peck. “Old Navy delivered another consecutive quarter of growth. Gap has made clear progress on its transformation agenda and we look forward to introducing customers to the brand’s spring collection, which embodies elevated American style.”

Gap Inc. ended the quarter with 3,794 stores, of which 2,582 are located in North America, and said it expects its total 2015 store count to be flat with the prior year.

While Peck touted some positive developments across the portfolio of brands, given the third quarter weakness the company lowered its full year profit forecast to a range of $2.38 to $2.42 from earlier guidance in the range of $2.75 to $2.80.