Gap Q1 sales plummet; talks streamlining

The nation’s largest U.S. apparel retailer is looking to streamline its model.



Amid first quarter same-store sales declines across all its brands, Gap Inc. said it is identifying opportunities to streamline its business to be more efficient and flexible. The retailer also is evaluating its Banana Republic and Old Navy store fleets, mostly outside of North America, with an eye to sharpening its focus on geographies with the greatest potential.



“Our industry is evolving and we must transform at a faster pace, while focusing our energy on what matters most to our customers,” said Peck, who became CEO of Gap in 2015. “We are committed to better positioning the business to recapture market share in North America and to capitalizing on strategic international regions where there is a strong runway for growth.”



Gap reported $3.44 billion in net sales during the first quarter, ended April 30, down from $3.66 billion in the year-ago period and short of analysts’ estimates for $3.54 billion.



Total same-store sales for the quarter fell 7% versus a 12% decrease last year. By brand, same-store sales were down 3% at Gap (global), 11% at Banana Republic (global) and 6% at Old Navy (global).



Same-store sales were down 7% in April. Analysts had predicted a gain of 1.1%.



Gap’s first quarter results came in the face of previous comments by Peck who had said the retailer would begin to show signs of a turnaround by this spring.



Gap gave a grim outlook for the quarter, and said it now expects to earn 31 to 32 cents per share for the quarter. The average analyst estimate was for earnings of 44 cents per share on revenue of $3.54 billion, according to FactSet.