Gap announces big loss, declining sales and executive shakeup

Gap reported disappointing holiday-quarter results Thursday and announced a bid of enforcement changes arsenic the struggling retailer continues to hunt for a imperishable CEO.

Shares of the institution fell successful off-hours trading.

Here's however the institution did successful its fiscal 4th fourth compared with what Wall Street was anticipating, based connected a survey of analysts by Refinitiv:

• Loss per share: 75 cents, vs. 46 cents expected
• Revenue: $4.24 cardinal vs. $4.36 cardinal expected

The company's reported nett losses for the three-month play that ended Jan. 28 was $273 million, oregon 75 cents a share, compared with a nonaccomplishment of $16 million, oregon 4 cents per share, a twelvemonth ago.

Gap reported income of $4.24 billion, down 6% from $4.53 cardinal a twelvemonth earlier. Comparable income were down 5% year-over-year and store income dropped 3%. Online sales, which correspond 41% of full nett sales, plummeted 10% compared to past year, the institution said.

The apparel retailer — which includes its namesake brand, Old Navy, Banana Republic and Athleta — has had a unsmooth year arsenic it grappled with galore nett losses, bloated inventory levels and a hunt for a imperishable CEO. The institution said it is "getting close" to picking its adjacent main executive.

The institution besides said it is eliminating its main maturation serviceman role, which has been held by Asheesh Saksena, effectual Thursday. The Athleta brand's CEO, Mary Beth Laughton, besides near the institution Thursday.

"We judge Athleta has unthinkable potential, but it has suffered from merchandise acceptance challenges
over the past respective quarters," Gap interim CEO Bob Martin said successful a release. "As we look to capitalize connected this imaginable and stay competitory amidst a dynamic landscape, we judge present is the close clip to bring successful a caller person who tin presumption Athleta for semipermanent success."

Chief People Officer Sheila Peters is besides leaving, albeit astatine the extremity of the year.

This clip past year, Gap struggled to get products connected the shelves amid worldwide proviso concatenation constraints and ended up flying successful apparel to support up with demand. Still, backlogs and delays kept inventories successful transit truthful by the clip it yet arrived, it was retired of play oregon retired of style, forcing the institution to connection steep discounts, which has chopped into profits.

In a agleam spot for Gap connected Thursday, though, the institution reported that inventory declined 21% year-over-year.

Overall, nett income for the twelvemonth dropped to $15.62 cardinal compared to $16.67 cardinal successful the anterior fiscal year. Net losses for the twelvemonth came successful astatine $202 million, compared to a nett income of $256 cardinal successful the anterior fiscal year.

Gap had primitively forecast adjusted per stock net of $1.85 to $2.05, with income increasing astatine a debased azygous digit percent complaint for the fiscal year. It slashed that guidance and past withdrew it altogether halfway done the twelvemonth amid plunging sales.

The institution said it withdrew the outlook due to the fact that of the uncertain macroeconomic situation and its ongoing efforts to marque changes and find a caller CEO.

In July, Sonia Syngal abruptly stepped down arsenic main executive. The institution has yet to find a imperishable replacement. Martin, the retailer's enforcement chairman, has been serving arsenic interim CEO successful the meantime.

In the erstwhile quarter, Gap sustained $53 cardinal successful impairment charges aft Ye, the rapper formerly known arsenic Kanye West, terminated his contract with the retailer citing evident declaration breaches and a deficiency of originative control. In precocious October, Gap removed all Yeezy products from its stores after Ye made anti-Semitic remarks.

Read the afloat net merchandise here.