SAN FRANCISCO (dpa-AFX) - Apparel retailer Gap Inc. (GPS), on Thursday reported a drop in profit for the first quarter, as revenues declined three percent, hurt mostly by continued weak sales at its namesake brand and Banana Republic. Both earnings and revenues for the quarter came in short of Wall Street estimates.
San Francisco-based Gap's first-quarter profit dropped to $239 million or $0.56 per share from $260 million or $0.58 per share a year ago. Results for the quarter includes a one-time benefit of about $0.02 a share related to a reversal of tax-related interest expense.
On average, 27 analysts polled by Thomson Reuters expected earnings of $0.56 per share for the first quarter. Analysts' estimates typically exclude special items.
Gap's sales for the first quarter fell 3 percent to $3.66 billion from $3.77 billion a year earlier. Thirty-two analysts had a consensus revenue estimate of $3.75 billion for the quarter.
Revenue drop mainly reflects lower same-store sales at Gap and Banana Republic brands, a strong dollar and supply constraints due to strike at West Coast ports.
Gap's comparable sales for the fist quarter declined 4 percent, compared with a 1 percent decline last year, as same-store sales at Gap slumped 10 percent and Banana Republic dropped 8 percent, Meanwhile, Old Navy reported a positive 3 percent same-store sales.
Chief Executive Art Peck said, 'Old Navy's performance gives me confidence - the team has hit the right formula and they are consistently delivering a truly aspirational experience that's resonating with customers. Gap remains a top priority as we focus on reestablishing the brand's aesthetic to bring to life an optimistic and elevated sense of American style.'
Looking forward to full year 2015, the company continues to see earnings of $2.75 to $2.80 per share. Analysts currently expect earnings of $2.78 per share for 2015.
GPS closed Thursday's trading at $38.56, down $0.11 or 0.28%, on the NYSE. The stock further dropped $0.08 or 0.21% in the after-hours trading.
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