Dive Brief:
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Gap Inc. Monday said Q4 same-store sales fell 7%, with same store sales at its Gap brand down 3% in the quarter, down 14% at Banana Republic, and down 8% at Old Navy.
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Overall Q4 sales were down 7%, missing FactSet estimates of a 5.1% decrease, reports Marketwatch.
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Gap shares have been down 42.6% for the year, but rose 0.7% in post-market trading Monday.
Dive Insight:
Gap Inc. showed new signs of life with this Q4 sales report, especially in its flagship brand, which has struggled to recapture the appeal (and sales) of previous years. Gap will report its full fourth quarter earnings Feb. 25.
Same-store sales fell 8% at its Old Navy brand, however, which, since that brand has buoyed the retail company in many of the past several quarters, reveals a new vulnerability.
Stefan Larsson's departure last year from his position as president of Old Navy to become CEO of Ralph Lauren has raised questions about how the company can sustain the strength of its most successful brand. Larsson during his tenure established systems to help the brand respond more swiftly to sales and restock fast-selling items. Gap CEO Art Peck said that both Gap and Banana Republic were learning from these lessons, which might help bring the turnaround investors have been looking for.
Last year Peck asked investors to be patient for spring, and CFO Sabrina Simmons, along with the company's relatively upbeat guidance, appeared to strike a similar note Monday.
“We are pleased to guide to the high end of our previously announced full-year earnings per share range,” Simmons said in a statement. “As we kick-off fiscal year 2016, our brands look forward to introducing their new Spring collections to customers.”