Gap has also seen comp sales decline in the past two quarters with decreases across all its brands. These declines are likely to continue in the to-be-reported quarter. The company is also likely to face pressures from the ongoing trade war and the resultant tariffs.
Earlier this year, the management decided to split the
company into two separate public entities. The focus of the restructuring is
the separation of the Old Navy brand, which accounts for nearly half of its
sales.
In the first quarter of 2019, Gap missed sales and earnings estimates due to disappointing comps. Net sales dropped 2% to $3.7 billion while adjusted EPS totaled $0.24. Comp sales declined 4% with decreases across all its brands.
Also see: Gap Inc. Q1 2019 Earnings Conference Call Transcript
For fiscal 2019, Gap expects unadjusted earnings in the range of $2.04-2.14 per share. The forecast for adjusted earnings is $2.05-2.15 per share. Full-year comparable store sales are expected to be down low single digits.
Shares of Gap have dropped 36% year-to-date and 26% in the past three months. The majority of analysts have rated it as Hold and the average price target is $20.54.