Gap Inc. Issues Q1 EPS Guidance; Plans To Streamline Operating Model

(RTTNews) - Gap Inc. (GPS) reported that, for the first quarter of fiscal 2016, net sales were $3.44 billion compared with $3.66 billion, last year. Gap Inc. expects earnings per share for the first quarter to be in the range of $0.31 to $0.32. The company said its gross margins were pressured as it entered April with more inventory than planned as a result of weaker than expected traffic, which began in late March 2016 and continued into April. Analysts polled by Thomson Reuters expect the company to report profit per share of $0.44. Analysts' estimates typically exclude special items. Analysts expected revenue of $3.54 billion for the quarter.

Gap Inc. said it is identifying opportunities to streamline operating model to be more efficient and flexible, while more fully exploiting its scale advantage. Additionally, the company is evaluating its Banana Republic and Old Navy fleets, primarily outside of North America, in order to sharpen its focus on geographies with the greatest potential.

The company reported net sales of $1.12 billion for the four-week period ended April 30, 2016, compared with net sales of $1.21 billion for the four-week period ended May 2, 2015.

Shares of Gap Inc. were down more than 10% after hours.