قالب وردپرس درنا توس
Home / Business / Gap posted a profit, why did the stock fall?

Gap posted a profit, why did the stock fall?



  5 Amazing Gap Statistics

The CEO of The Gap is still a fan of the traditional retail store. His investors? Not so much.

The Gap ( GPS ) crashed 10% in the trade after the company reported weak results in its flagship Gap brand businesses late Thursday.

During a telephone conversation with investors on Thursday night, CEO Arthur Peck shied away the idea that the company had not done enough to reduce its store numbers. The company closed 36 stores during the quarter, most of them Gap and Banana Republic. With the expansion of the sites Old Navy and Athleta 45 shops were opened. The company closed the quarter with approximately 3,600 branches.

"I have to be honest here, it puzzles me to hear over and over again that business is a burden," said Peck. Sure, if you have a shop in a dying mall, that store has to go away, and that's work we got early and we'll go on, but the simple fact is that most Garments are still sold in stores and continue to be sold in stores. "

" Stores are the deepest form of customer retention, "he continued. "And one thing that the industry does not talk about is very important to me, that it is a source of an immense amount of customer data."

The stock crashed on Friday, though the company's earnings report was not terrible.

Gap Inc. raised profits, bucking Wall Street's expectations in terms of profit and earnings. He reiterated his full-year forecast, which is more optimistic than the current consensus estimates.

But there were concerns about the prospects for its Gap brand businesses, which accounts for nearly half of the locations. Turnover in the gap stores, which had been open for at least a year, a closely monitored trading volume known as "same store sales" decreased by 5%. That was worse than the decline of 1

% a year ago.

Old Navy profits and a slight increase in Banana Republic allowed the company an overall 2% increase in the same deals.

However, given the strength of the economy as a whole and consumer buying behavior, the results were a big disappointment to investors. Some analysts said they believe the company needs to do more to make room between the holding company and the Gap brand.

"It seems like the market thinks that Gap, Inc. is Gap, but the company is really Old Navy," Randal Konik of Jefferies said during the pay call. "How do you feel about … the position of how much real estate should be devoted to these businesses?"

The company announced plans in September to open 270 Old Navy and Athleta brand stores and close 200 Gap and Banana Republic locations over three years.

Gap was not the only retailer whose stock went down on Friday.

Hibbett Sports ( HIBB ) reported a loss rather than the expected gain this quarter, sending its stock up 30%. The shares of Foot Locker ( FL ) which perform slightly better than expected but weakly show the same store sales also declined by 12%. Sector Leader Dicks Sporting Goods ( DKS ) which reported no results at all, also had its shares lost due to concerns over the industry's weakness.

CNNMoney (New York) First published on August 24, 2018: 3:06 pm ET


Source link