Gap Inc. (NYSE: GPS) on Thursday announced second quarter revenue and earnings that beat analysts’ estimates, but comparable sales for its Gap brand missed analysts’ expectations, sending its shares down more than 10%.
The apparel Company said net sales rose 8% to USD 4.1 Billion in the quarter ended August 4th, 2018. Excluding certain items, the Company earned 0.76 cents per share, beating analysts’ expectation of 4 cents per share.
“We delivered our seventh consecutive quarter of positive comparable sales growth, led by the strength of Old Navy,” said Art Peck, President and Chief Executive Officer, Gap Inc. “Our balanced growth strategy supports continued growth and improved profitability, and our investments are focused on leveraging the advantages of our scaled operating platform and accelerating the impact of our significant data assets.”
Second quarter comparable sales increased 2%, boosted by strong growth in its Old Navy brand and Banana Republic brand. However, Gap brand comparable sales fell 5% in the second quarter.
“The second quarter played out largely as expected, and we are reaffirming our guidance on the year,” said Teri List-Stoll, Executive Vice President and Chief Financial Officer, Gap Inc. “We are pleased with the meaningful improvement at Banana Republic, and our work to increase productivity is funding investments in the business to drive differentiation and continued growth.”
Gap shares fell 11% to USD 28.71 per share in the early trading on Friday.
The Company reaffirmed its full-year earnings guidance. For 2018, The Company expects earnings per share to be in the range of USD 2.55 to USD 2.70.