Gap Inc shares (NYSE: GPS) opened roughly 20% down on Friday after the clothing and accessories retailer lowered its guidance for the fiscal first quarter.
Gap’s revised guidance for fiscal Q1
The California-based company cited execution challenges particularly in its Old Navy business for the dovish outlook. It now expects low-to-mid-teens decline in its current fiscal quarter versus mid-to-high-single-digit it had forecast earlier.
In its fiscal Q4, comparable sales at Old Navy had come in flat versus 2019 equivalent. Gap will report its first-quarter results in the final week of May. That’s when it’ll offer updated outlook for full year 2022 as well.
The American retailer is set to wind down its Banana Republic stores in Europe by the end of May. The stock down 40% year-to-date now trades at a PE multiple of 18.72.
Old Navy CEO Nancy Green to step down
The NYSE-listed company also confirmed that CEO Nancy Green of the Old Navy Brand will step down this week. Sonia Syngal – the chief executive of Gap Inc said:
As we look to seize Old Navy’s potential, particularly amidst the macroeconomic dynamics facing our industry, we believe now is the right time to bring in a new leader.
Ever since its peak in May of 2021, Gap has been struggling with supply constraints and inflationary pressures. Consequently, the retailer has met with a string of downgrades this year.
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Source: https://invezz.com/news/2022/04/22/gap-shares-opened-20-down-on-friday-explore-why/