Gap Inc. shares plunged in early trading after the apparel chain posted disappointing results, a sign the company’s much-vaunted springtime comeback hasn’t materialized. Same-store sales – a key benchmark – dropped 7 percent in April, the San Francisco-based retailer said in a statement Monday. Analysts had predicted a gain of 1.1 percent, according to Retail Metrics.
Chief Executive Officer Art Peck, who took the reins last year, had said the company would show signs of a turnaround by this season. Instead, sluggish store traffic in March continued into April. The company’s budget-minded Old Navy fared especially poorly last month. Comparable sales at that chain plunged 10 percent in April, compared with the 2.6 percent increase analysts had estimated.
The company also said it’s evaluating its Banana Republic and Old Navy chains to find ways to be more efficient, especially outside of North America. It will give more details when Gap reports its final first-quarter results on May 19.
“Our industry is evolving and we must transform at a faster pace, while focusing our energy on what matters most to our customers,” Peck said in the statement. “We are committed to better positioning the business to recapture market share in North America and to capitalizing on strategic international regions where there is a strong runway for growth.”