Gap Inc. now expects earnings to surpass its previous guidance. The clothing retailer also said that it no longer wants a spinoff of its Old Navy business.
Gap now expects adjusted fiscal year 2019 earnings per share to be moderately above its previous guidance of $1.70 - $1.75 a share, on the back of higher-than-anticipated promotional levels over the holiday period, particularly at Old Navy.
The company is now anticipating comparable sales to be at the higher end of its previous guidance range of down mid-single digits. It projects net sales to be at the higher end of previous guidance of down low-single digits.
Gap also suggested that it is no longer pursuing a spinoff of its Old Navy business. The cost and complexity of splitting into two companies couple with softer business performance have limited its scope to create appropriate value from separation, as indicated by a statement given by Robert Fisher, Gap's interim president and chief executive officer.