Gap, the largest clothing-focused retailer in the US, reported second-quarter profit that met analysts’ estimates as the company revamps its flagship brand. Profit amounted to 64 cents a share, excluding the 12-cent impact from a move to close about 175 Gap stores and eliminate 250 corporate jobs, the San Francisco-based company said in a statement on Thursday.
That was in line with the company's own projections and analyst estimates. Art Peck, who took the chief executive officer job in February, is trying to shape up the company's Gap and Banana Republic chains, which have trailed the performance of its lower-end Old Navy business.
He’s also coping with a strong US dollar, which has hurt the value of overseas sales, and inventory problems stemming from delays at West Coast ports. The company’s comparable sales fell 2 per cent last quarter from the same time a year earlier. “I remain confident in our strategies to improve business performance and drive loyalty going forward,” Peck said in the statement. The stock was little changed in late trading after the results were posted.
Net income fell 34 per cent to $219 million (€195 million), or 52 cents a share, from $332 million, or 75 cents, a year earlier. Net sales declined about 2 per cent to $3.9 billion in the period, which ended on August 1st . In June, the retailer announced it would close about a quarter of full-price Gap locations and cut about 250 corporate jobs.
– (Bloomberg)
