GPS Gap Inc

Gap Inc. said it would take steps to streamline its business, including evaluating its Banana Republic and Old Navy operations outside North America, as it posted comparable sales declines across its brands.

The company also said it expects earnings for the first quarter to come in much weaker than analysts had expected—the company forecast 31 cents to 32 cents a share of earnings, below market expectations of 44 cents a share.

In after-hours trading, shares fell 9.9% to $19.65. The stock has fallen 45% in the past 12 months through Monday's close.

The company said it would make moves to "better position the company for improved business performance" and that it was "evaluating its Banana Republic and Old Navy fleets, primarily outside of North America in order to sharpen its focus on geographies with the greatest potential."

For the quarter, the company said its Gap global comparable sales fell 3%, while Banana Republic dropped 11% and Old Navy fell 6%. Total sales for the quarter fell to $3.44 billion from $3.66 billion, below analysts' expectations of $3.54 billion.

Gap said April total sales were $1.12 billion, down from $1.21 billion for the comparable 2015 period. Comparable sales dropped at 4% at the Gap brand, while Banana Republic and Old Navy posted declines of 7% and 10% respectively.

Gap, which previously disclosed that gross margins were pressured due to high inventory levels, said Monday that the timing of Memorial Day is expected to hurt May sales results and help June figures.

Last June, Gap said it would close about 175 of its namesake North American stores, or about 25% of its total, including 140 by the end of its fiscal year in January. The company also said it would eliminate 250 corporate jobs, mostly in North America.

Write to Josh Beckerman at josh.beckerman@wsj.com

Corrections & Amplifications: Gap's forecast for first-quarter earnings is 31 cents to 32 cents. An earlier version of this article misstated the forecast as 31 cents.

(END) Dow Jones Newswires

May 09, 2016 17:15 ET (21:15 GMT)

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