Gap Reports Drop in March Sales, High Inventory Levels
08 April 2016 - 7:51AM
Dow Jones News
By Maria Armental
Gap Inc. said Thursday that its sales fell in March and that
high inventory levels will pressure profits in the first
quarter.
Shares of Gap, down 35% over the past year, fell 9% to $25.20 in
after-hours trading.
"While March proved challenging, we remain focused on taking the
necessary steps to improve results," said Sabrina Simmons, Gap's
chief financial officer.
Gap said its margins in the first quarter will be under pressure
because the retailer entered April with more inventory than
planned. Retailers, when faced with high amounts of inventory,
frequently will discount prices, a move that can hurt profits.
For the five weeks ended April 2, Gap's total sales fell to
$1.43 billion from $1.53 billion a year ago. On a comparable basis,
a key metric to assess retailers' performance, Gap's same-store
sales declined 6% in March; in the year-ago period, sales rose
2%.
At its different brands, the largest decline came from Banana
Republic, which reported a 14% drop in same-store sales, compared
with a 3% fall a year earlier. Old Navy, which has been a key sales
driver, reported a 6% decrease in same-store sales, compared with a
14% increase a year ago.
Same-store sales at Gap's namesake stores fell 3%, narrower than
a 7% drop in the year-ago period.
Write to Maria Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
April 07, 2016 17:36 ET (21:36 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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