The retailer lowered its annual sales outlook after Old Navy’s 1% comparable sales growth fell short of the 3% analysts expected.
Gap reduced its full-year sales guidance to 1%-2% growth from a prior 2%-3% range after Old Navy’s fiscal first-quarter comparable sales rose just 1%, missing StreetAccount’s 3% estimate. The company cited weak spring and summer assortments, particularly in dresses and swimwear, while denim, activewear, and kids’ categories performed strongly.
Adjusted earnings per share guidance was raised to $2.30-$2.40 from $2.20-$2.35, reflecting improved profitability despite softer sales. First-quarter adjusted EPS came in at 38 cents, slightly above the 37-cent consensus.
CEO Richard Dickson attributed the sales miss to product execution rather than macroeconomic pressures, noting strong demand across income cohorts when the right products are offered.