RP: Gap’s 1Q Profit Down 8 Percent on Currency Fluctuations
By Anne D’Innocenzio, The Associated Press on May 21, 2015.
Gap (NYSE:GPS) last announced its earnings results on Thursday, February 26th.
In terms of foreign exchange impact on the company, Gap said the translation of foreign currencies in to dollars resulted in a negative effect of $90 million due to a weakening Yen and Canadian Dollar. As with many retailers, the chain has also been hurt by the West Coast port slowdown that delayed shipments of merchandise.
The San Francisco-based company, however, stuck with its annual profit outlook Thursday.
The retailer moved to overhaul the executives in charge of its namesake brand, changes that included the return of Wendi Goldman, a former Banana Republic veteran who once led Victoria’s Secret Pink line and expanded the Express brand for Limited Brands Inc. and most recently worked as chief product officer for the now defunct C. Wonder. Gap Inc. offers apparel, accessories, and personal care products for men, women, children, and babies under the Gap, Old Navy, Banana Republic, Piperlime, and Athleta brands. The company is also overhauling its fashions to make them resonate with shoppers.
Spring is a “no excuse moment, ” Mr. Peck told analysts on a conference call to discuss the company's first quarter earnings. “I believe we’ve diagnosed it correctly… and I can promise you that the team is all over it”.
While Gap’s sales fell to $3.66 billion from $3.77 billion in 2014, it still beat analysts EPS forecasts of 0.55 for the quarter.
Analysts expected earnings of 56 cents per share on revenue of $3.69 billion, according to Zacks Investment Research.
Looking forward to full year 2015, the company continues to see earnings of $2.75 to $2.80 per share. That includes an 8 percent drop at Banana Republic, a 10 percent drop at Gap and a 3 percent increase at lower-priced Old Navy, the company’s strong spot.
The analyst consensus price target for Gap, Inc. Earnings per share were $0.54. Analysts at Sterne Agee CRT reiterated a “neutral” rating and set a $38.00 price target (down previously from $41.00) on shares of Gap in a research note on Tuesday, May 12th. The shares opened for trading at $38.65 and hit $38.8 on the upside, eventually ending the session at $38.67, with a gain of 0.13% or 0.05 points.
