Gap share price down 10% after Q1 results revenue miss
The retailer's stock slides after a disappointing Q1 earnings report.
Gap share price fell after a lackluster Q1 earnings report. The retailer missed Wall Street estimates in earnings per share and revenue.
Gap earnings: key figures
|Earnings per share||$0.24|
Gap’s Q1 earnings down as retailer struggles to draw shoppers
Gap’s Q1 earnings per share were $0.24, much less than the $0.32 expected by financial analysts. Gap’s Q1 revenue was $3.71 billion, falling under the projected $3.77 billion. The retailer’s same-store sales were down 4%, surpassing the expected 1.1% drop. As a result of slow sales, Gap will close 30 stores in 2019.
Chief executive officer (CEO), Art Peck, blamed bad weather for the decline in sales and said that Gap’s Q1 results were badly impacted by ‘one of the coldest, wettest quarters in memory.’
‘This quarter was extremely challenging, and we are not at all satisfied with our results. We are committed to improving our execution and performance this year’, said Peck.
How did Gap’s Q1 results compare to other retailers?
Gap’s Q1 earnings were worse than Abercrombie and Fitch’s results. Abercrombie and Fitch’s Q1 revenue beat expectations, while Gap’s Q1 revenue fell below estimates.
Gap’s Q1 profits were comparable to JCPenney’s earnings. Both corporations had worse-than-expected Q1 results.
What’s Gap’s full-year earnings outlook?
For fiscal year 2019, Gap’s earnings per share are projected to be between $2.05-$2.15. That range falls below the $2.40 per share that financial experts expected.
Gap is also preparing to spin off its Old Navy brand into a separate corporation in 2020. Peck spoke about how the retailer hopes to boost sales by splitting into two companies.
‘We remain confident in our plan to separate into two independently traded public companies in 2020, and we are focused on setting up both companies for long term value creation and profitable growth,’ said Peck.
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