Gap posted third quarter earnings that missed analysts’ expectations.
The clothing retail company’s earnings came in at 27 cents compared to 50 cents expected by analysts polled by Refinitiv.
Revenue of $3.94 billion also fell short of $4.44 billion expected.
Gap’s inventories were down -1% at the end of the third quarter from a year ago. They were flat versus 2019. The company expects fourth-quarter inventories to be up high-single digits year over year.
Looking ahead, Gap expects full-year revenue to increase about 20%, vs. its prior forecast of about a 30% increase. Analysts polled by Refinitiv were expecting a 28.4% year-over-year gain.
Gap now projects adjusted full-year earnings to a range of $1.25 to $1.40 per share, lower than prior range of $2.10 to $2.25 a share. Analysts had expected $2.20 per share (based on Refinitiv data). The company said that the downward revision in outlook incorporates the $550 million to $650 million of lost sales from supply chain constraints and about $450 million in air freight costs.