Dropping Sales at Gap’s Key Brands hurt the Company’s Shares
San Francisco, California based Gap Inc, which operates five well known brands is struggling with declining sales. On Thursday, shares of the apparel company dropped almost nine percent during the after-hours trading.
It followed an announcement from the clothing retailer that reported its March results, revealing a slide in sales for the twelfth straight month. The retailer reported drop in comparable sales for three of its biggest brands in March. The company also warned entering April with a high levels of inventory that could affect the profit margins.
The company said on Thursday its revenue at established stores dropped more than six percent for Banana Republic, Old Navy and its Gap, all the three are key brands. The analysts expected a drop but a smaller one at 4.3 percent.
If seen separately, Gap's revenue at established stores dropped three percent, Banana Republic's sales dropped fourteen percent and for Old Navy it was a six percent drop.
The drop in sales makes CEO Art Peck's work tougher for a turn around. He took over as CEO in February 2015. The company has undergone quite a few leadership and management changes in recent years.
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