Gap down on latest profit decline, lower year outlook |

Gap down on latest profit decline, lower year outlook

Associated Press

CHICAGO – Gap Inc. stock tumbled Friday, a day after the company reported a sharply lower third-quarter profit due to fashion miscues and falling sales.The shares fell $1.55, or 8.4 percent, to $16.96 in midday trading on the New York Stock Exchange.The San Francisco-based company, which also operates Banana Republic and Old Navy stores, said that earnings dropped to $212 million, or 24 cents a share, from $265 million, or 28 cents a share, in the same period a year earlier.Sales fell to $3.86 billion from $3.98 billion a year ago – their worst showing in more than three years.Sales at stores open more than one year, or same-store sales, tumbled 7 percent. The biggest decline came out of Old Navy, which saw same-stores drop 8 percent while net sales slipped to $1.6 billion.Gap stores turned in a 4 percent decline in same-stores sales, while net sales were flat at $1.4 billion.At the Banana Republic stores, receipts at stores open more than a year fell 7 percent while net sales slipped marginally to $537 million.”Our third-quarter results were unacceptable,” said Chief Executive Paul Pressler. “However, the issues we face today are fixable, and we are aggressively executing plans to provide more compelling product and exceptional store experiences for our customers.”The company has acknowledged since early spring that it has been off on its merchandise mix – missing, for example, the important denim craze that has dominated the fashion scene this year.It doesn’t appear that things will improve soon. “Traffic trends have continued to deteriorate beyond anticipated levels,” the company said in its earnings statement. “As a result, the performance of the first holiday flows is below expectations.”Gap pulled its full-year forecast down to a range of $1.12 a share to $1.17 share from an earlier projection of $1.30 a share to $1.34 a share.Vail, Colorado

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