Gap Inc (NYSE: GPS) opened nearly 20% down on Friday after the clothing retailer reported weak results for its fiscal first quarter and gave disappointing guidance for the future.
Gap Q1 earnings snapshot
Lost $162 million versus the year-ago figure of $166 million in net income.
Per-share loss of 44 cents was much worse than last year’s 43 cents of EPS.
Revenue dropped 13% YoY to $3.47 billion, as per the earnings press release.
FactSet consensus was for 15 cents of per-share loss on $3.44 billion in revenue.
Comparable and digital sales were down 14% and 17% in Q1, respectively.
Gross margin tanked 930 bps to 31.5%. Old Navy performed the worst in the first quarter, with sales down 19% versus the same quarter last year. Its CEO stepped down last month.
Full-year outlook and CEO’s remarks
For the full financial year, Gap forecasts low-to-mid-single-digit decline in revenue on up to 70 cents of adjusted per-share earnings. The stock is now down 50% for the year.
In comparison, analysts had called for a 2.70% decline in revenue on $1.22 of EPS. In the earnings press release, CEO Sonia Syngal said:
We believe we can navigate this period of acute disruption and build an even more resilient and agile company. We’re focused on making continued progress against our Power Plan Strategy and getting back on track toward delivering growth, margin expansion, and value for our shareholders over the long-term.
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