Gap cut its 2019 profit forecast and posted the biggest drop in same-store sales in at least three years at its Gap brand. The cut reflects struggles to compete within the fashion sector in the face of changing customer preferences.
Chief Executive Officer Art Peck called the quarter “extremely challenging” and cited unusually cold weather in February, late spring breaks, a delayed Easter and lower tax refunds as reasons for the dour performance.
Chief Financial Officer Teri List-Stoll said there was a lack of strong products at both Old Navy and Gap in the first quarter and said the company had held back on marketing until designs and assortments improved.
Sales at established Gap brand stores fell 10% in the three months ended May 4, steeper than the 4% decline analysts had estimated.