(Reuters) – Gap Inc <GPS.N> reported quarterly same-store sales below analysts’ expectations on Tuesday, as its namesake brand posted another weak performance and its more affordable Old Navy line of clothing also missed estimates.
Sales at established Gap brand stores fell 7 percent, much bigger than the 4 percent drop analysts had expected, according to IBES data from Refinitiv.
Same-store sales at the brand have missed estimates in seven of the last eight quarters as shoppers move away from its logo-emblazoned sweatshirts and t-shirts to fast-fashion trends from rivals such as H&M <HMb.ST>, Inditex’s <ITX.MC> Zara and Forever 21.
The more affordable Old Navy brand, so far a bright spot for the company, also missed Wall Street’s estimates for same-store sales. Old Navy’s comparable store sales rose 4 percent, while analysts expected a 4.65 percent jump.
Overall company same-store sales were flat in the three months ended Nov. 3, while analysts’ on average estimated a 1.09 percent gain.
Net income rose to $266 million, or 69 cents per share, in the third quarter, from $229 million, or 58 cents per share, a year earlier.
Excluding items, Gap earned 69 cents per share, beating the average estimate by a cent.
Net sales rose 6.5 percent to $4.09 billion, slightly above the average estimate of $4 billion.
The company cut the top end of its full-year profit forecast to $2.60 per share from $2.70, retaining the lower end at $2.55.
(Reporting by Nivedita Balu in Bengaluru; Editing by Sriraj Kalluvila)