Gap Stock Tumbles 15% After Cutting Sales Outlook on Old Navy Dress Flop
GAP•Gap shares plunged 15% premarket after cutting full-year sales growth guidance to 1%–2% due to persistent Old Navy dress style challenges. Net sales rose 2% to $3.5 billion with EPS of $0.38, while Gap brand same-store sales gained 10% and full-year profit guidance rose to $2.30–2.40 per share.
1. Stock Decline and Guidance Revision
Gap shares tumbled 15% in premarket trading after the company cut its full-year sales growth guidance to 1%–2%, down from an earlier range of 2%–3% following a disappointing quarter in key categories.
2. Old Navy Dress Challenges
Persistent style and value misalignment in Old Navy’s women’s dress assortment drove the company’s decision to slash sales guidance, with CEO Richard Dickson acknowledging a weak start in dress performance that has continued into the second quarter.
3. Brand Performance
The Gap division delivered a 10% same-store sales increase led by denim and fleece, Banana Republic posted a 2% gain, while Athleta’s same-store sales declined 11%, highlighting a mixed portfolio of brand results.
4. Financial Metrics and Profit Outlook
First-quarter net sales rose 2% to $3.5 billion, with diluted EPS of $0.38 exceeding estimates, and management raised full-year adjusted EPS guidance to $2.30–2.40 per share despite the lower sales outlook.
