Gap Inc. shares are tumbling after the apparel retailer reported same-store sales for its namesake brand after the bell on Thursday that missed analysts’ expectations for the second quarter, overshadowing a beat on earnings and revenue.
The stock was still falling more than 8.5 percent Friday morning on the news.
The company reported that its net sales for the first quarter were $4.1 billion, an increase of 8 percent compared with last year. Excluding the impact from the adoption of the new revenue recognition standard, net sales increased 4 percent compared with last year. Gross profit was $1.63 billion, an increase of 10 percent compared with last year.
Same-store sales at the Gap brand fell 5 percent while same-store sales rose 5 percent at Old Navy and rose 2 percent at Banana Republic. Overall, same-store sales increased 2 percent.
“We delivered our seventh consecutive quarter of positive comparable sales growth, led by the strength of Old Navy,” said Art Peck, president and chief executive officer, Gap Inc. “Our balanced growth strategy supports continued growth and improved profitability, and our investments are focused on leveraging the advantages of our scaled operating platform and accelerating the impact of our significant data assets.”
“The second quarter played out largely as expected, and we are reaffirming our guidance on the year,” added Teri List-Stoll, executive vice president and chief financial officer, Gap Inc. “We are pleased with the meaningful improvement at Banana Republic, and our work to increase productivity is funding investments in the business to drive differentiation and continued growth.”