Gap Basic Sales Slow Down

Gap Inc. (NYSE:GPS), which no longer provides monthly sales data, disclosed that the Group needed to increase its sales in the first quarter earnings report when it disclosed that the basic T-shirts, dresses, and men's shorts accumulated in Gap's branded stores were unattended. Efforts to clean up excess stocks have led to poor profitability over market expectations.

Gap

Gap Inc. (NYSE:GPS) plummeted by up to 11% in late trading Thursday, and the stock has risen 50% in the past 12 months as of Thursday's close, mainly due to Old Navy's old Navy brand leading the way in growth and Banana Republic Banana brand recovery.

In the first quarter of May 5, Gap Inc.'s Gaipu Group Yoins Coupon Code recorded a 1% increase in same-store sales. Although it has increased for six consecutive quarters, it has not risen as much as the market expected 1.7%. The growth of Old Navy, the largest business, narrowed significantly from 8% in the same period last year to 3%, which also failed to meet market expectations. Banana Republic went from a 4% drop in the same period last year to a 3% increase. The Gap brand maintained a 4% decline, and the market forecasted a drop of only 0.4%.

Gap Inc.’s chief financial officer, Teri List-Stoll, pointed out in the post-financial teleconference that the first quarter presents various challenges, among which the Gap brand management problem has long been anticipated, but snowy weather and abnormally cold springs are unexpected. CEO Art Peck said to the analyst: “If you have too much inventory or wrong inventory, holding them will not get a turnaround. So we act decisively. This is not without pain, but we believe it is absolutely correct. Practice.” He also stressed that weak demand is not because customers do not like their style and fashion.

Art Peck fired the Gap brand president and CEO Jeff Kirwan in February this year and still failed to fill the gap.

In the first quarter, Gap Inc.’s net sales increased 10% year-on-year to US$3.783 billion, which was better than market expectations of US$3.61 billion. Due to the slow sales of the Gap brand, overall deposits rose by 3.8% from the same period last year to US$2.035 billion; adjusted gross profit margins dropped by 120 basis points to 36.7%. Net profit rose by 14.7% year-on-year to US$164 million, and EPS increased from US$0.36 in the same period last year to US$0.42, while the market forecast was US$46 million.

As of the end of the quarter, Gap Inc. had 3,617 stores worldwide, and a net increase of 23 stores during the quarter. The plan for the year is a net increase of 25 stores, including 60 Old Navy stores. The Gap brand and Banana Republic, which the group proposed last year to reduce 200 stores in three years, closed 18 stores in the first quarter. Art Peck stated that the new store will focus on shopping malls and street shops with more open space and away from traditional shopping malls.

Gap Inc. (NYSE:GPS) closed at 32.95 US dollars on Thursday Free Promo Codes and rose 3.03% throughout the day. Brokerage firm Telsey Advisory Group LLC raised the stock rating from “underperform” to “flat” earlier this month on the grounds that the group “gradually improved its operating momentum and increasingly healthy brand portfolio”. The combination includes Art Peck, a sports brand known as “the most unknown gem” in the financial report, Athletea, which has achieved sustained and strong performance thanks to the prevalence of sports and leisure trends. It is the Group’s key expansion target.

Chief Financial Officer Teri List-Stoll pointed out in the earnings report that although it was under pressure in the first quarter, but based on confidence in business fundamentals and a balanced growth strategy, he reiterated the expected EPS for the whole year between 2.55 and 2.70 US dollars, with a median win of 2.625 US dollars. The market expects $2.60.