Gap Inc. shares tumbled in extended trading Thursday after the company said CEO Art Peck will be stepping down, effective immediately.
Gap also slashed its forecast for the year, citing a "challenging quarter." Its shares sank more than 7% in after-hours trading on the news.
Robert Fisher, currently the company's non-executive chairman, will serve as CEO on an interim basis. Fisher is a member of Gap's founding family.
Gap didn't provide any additional details as to why Peck is leaving, after serving as CEO since 2015 and working at Gap for almost 15 years. However, the company is seeing slumping sales at all of its major brands. The retailer was in the midst of splitting into two publicly traded companies — one company would house its faster-growing Old Navy brand, while the second would oversee Gap, Banana Republic and its other brands such as Athleta.
CFO Teri List-Stoll said the quarter was hurt by "macro impacts" and slower foot traffic, which "further pressured results that have been hampered by product and operating challenges across key brands."
The clothing retailer said third-quarter company-wide same-store sales fell 4%, compared with flat growth a year ago. It said sales at the Gap brand were down 7% during the latest quarter, they dropped 3% at Banana Republic and declined 4% at Old Navy.
Gap warned third-quarter net income to range between 50 cents and 52 cents a share. On an adjusted basis, it expects to earn 34 cents to 36 cents a share.
For the year, the company now expects to earn between $1.70 and $1.75 a share, down from a prior range of $2.05 to $2.15 a share.
It's set to deliver a complete earnings report for its fiscal third quarter on Nov. 21.
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November 08, 2019 at 04:23AM
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Gap shares tumble after CEO Art Peck steps down and retailer issues weak forecast - CNBC
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