Gap Inc. lowered its full-year earnings outlook. Additionally, it revealed that CEO Art Peck would be stepping down.
For the third quarter, the clothing retail giant’s same-store-sales declined -4%, including a -7% plunge in the Gap banner, a -3% decline in Banana Republic, and a -4% reduction in Old Navy same-store sales.
Adjusted earnings for the quarter are expected to be 50 to 52 cents, compared to the FactSet consensus estimate of 51 cents.
Gap’s latest full-year adjusted earnings guidance is in the range of $1.70 to $1.75 per share – much lower than its prior forecast of $2.05 to $2.15 per share. The FactSet consensus estimate is $1.86 per share.
CFO Teri List-Stoll cited macro impacts and slower traffic as additional headwinds to results that have been affected by “product and operating challenges across key brands”.
Separately, Gap announced that Art Peck is leaving the company. Under Peck’s leadership, the retailer planned to close more than half of its Gap-branded stores and spin off its Old Navy division into a standalone business by 2020. Peck has led the group since 2015. He will be replaced by board chairman Robert Fisher, a member of the company's founding family.