Gap’s share price falls after reporting downbeat full-year earnings outlook
After announcing a fairly downbeat full-year earnings outlook, retailer Gap's share price slid over four per cent in after hours trading.
The company said that it now expects diluted earnings per share to be in the range of $2.20 – $2.25 for the 2016 fiscal year, against expectations of $2.44 per share.
The news came as the company, which owns Banana Republic and Old Navy, reported net income of $214m (£153m) to the 13 weeks to January 30, down from $319m a year ago.
That meant earnings per share were 53 cents, down from 75 cent per share in the same period a year ago.
Net sales also fell to $4.4bn from $4.7bn. Still, it was better than expectations of earnings per share of 51 cents on sales of $4.4bn, according to the Financial Times. The company said it was negatively hit by the "translation of foreign currencies into US dollars".
Adjusted earnings per share was reported at 57 cents, excluding the $25m and $132m pretax impact of initiatives announced in June, including the closure of 175 stores.
"With a year of transition behind us, I’m confident that we have the right strategies in place to fuel our long-term growth," said chief executive Art Peck. "We made significant progress in 2015 transforming our product operating model, enabling us to be more responsive to trends and market conditions, and consistently deliver on-brand product collections."
"Our brands are strengthening their connections with customers through digital, and especially mobile, enhancement that create richer experiences whether shopping online or in stores, or any combination of channels," Peck added.
However, Gap's share price has been haemorrhaging since the start of 2015, dropping by more than 35 per cent.
It's said in the past that spring would be a watershed moment for the retailer, but it has faced tough competition from the likes of H&M due to the increasing use of ecommerce to buy clothes.
Gap also said it approved a new $1bn share repurchase plan.