Though Gap Inc. has promised pickup in sales for the last few quarters, the company reported downturns across brands for Q1 2016.
Gap Inc.’s net sales for the quarter were $3.44 billion, compared with $3.66 billion for the first quarter of 2015. The company announced expected earnings per share for the first quarter to be in the range of $0.31 to $0.32.
Following this announcement, the retailer’s shares fell about 10 percent in extended trading, according to Reuters.
Comparable sales at Gap Inc. were down five percent, versus a four percent decrease last year. The Gap brand showed improvement, at negative three percent in comparable sales, versus negative 10 percent last year. However, the situation worsened at Banana Republic, which was down 11 percent, and at Old Navy, down six percent.
Gap Inc. said that it is “identifying opportunities to streamline its operating model to be more efficient and flexible, while more fully exploiting its scale advantage.” This follows the company’s announcement almost a year ago to close 175 stores. Gap Inc. said it is specifically evaluating Banana Republic and Old Navy stores, mainly outside of North America to sharpen focus on geographies with the most potential.
“Our industry is evolving and we must transform at a faster pace, while focusing our energy on what matters most to our customers,” said Art Peck, chief executive officer, Gap Inc. “We are committed to better positioning the business to recapture market share in North America and to capitalizing on strategic international regions where there is a strong runway for growth.”
Gap Inc. will release its first quarter earnings results via press release on May 19, 2016.