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Gap shares tumble 13% as retailer cuts sales guidance after disappointing Old Navy performance
Old Navy’s comparable sales rose 1%, below expectations, as Gap raised its adjusted earnings forecast and warned of weaker companywide growth.
- On Thursday, Gap cut its companywide sales guidance to 1%–2% from 2%–3% after Old Navy comparable sales grew only 1%, missing the 3% analyst expectation, sending shares tumbling more than 10% in extended trading.
- CEO Richard Dickson attributed Old Navy's sluggish performance to a failed spring and summer assortment, stating, "It's not a consumer issue," while noting that dresses and swimming shorts were particularly weak.
- Results diverged across the portfolio as Gap namesake sales soared 10% to $796 million and Banana Republic comparable sales grew 2% to $431 million, while Athleta comparable sales fell 11%.
- Chief Financial Officer Katrina O'Connell raised adjusted earnings per share guidance to $2.30–$2.40, citing tax and interest income benefits and an $80 million tariff-rate benefit she is reserving for fuel and promotions.
- New CEO Maggie Gauger is working to streamline Athleta's assortment, with Dickson expecting operational improvements in the back half of the year to address the brand's ongoing sales declines.
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Total News Sources11
Leaning Left3Leaning Right0Center7Last UpdatedBias Distribution70% Center
Bias Distribution
- 70% of the sources are Center
70% Center
L 30%
C 70%
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