Gap shares tank 15% on earnings miss, CEO calls quarter ‘extremely challenging’

Earnings

Art Peck, president and chief executive officer of Gap Inc.

David Paul Morris | Bloomberg | Getty Images

Gap Inc. shares tanked Thursday after the apparel retailer reported quarterly earnings and sales short of Wall Street estimates.

Its shares cratered more than 10% in after-hours trading, having closed the day at a fresh low of $20.60 not seen since June 2016.

Here’s what the clothing retailer reported compared with what analysts were expecting, based on Refinitiv data:

  • Earnings per share, adjusted: 24 cents vs. 32 cents, expected
  • Revenues: $3.71 billion vs. $3.77 billion expected
  • Same-store sales: down 4% vs. a 1.1% drop expected

The report from Gap comes as a slew of apparel retailers ranging from Canada Goose to Abercrombie & Fitch to J.Jill have reported dismal earnings this week, dragging down the S&P 500 Retail ETF (XRT). That index of stocks has fallen more than 11% so far this month. Gap shares are down about 20% so far this year.

Gap shares had surged more than 20% Feb. 28 when the retailer announced it plans to spin off its Old Navy brand into its own public company, leaving Gap’s other brands, including its namesake one, in a new, still-unnamed holding company. That deal isn’t expected to be complete until 2020.

This is a developing story. Please check back for updates.

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