Gap has not lived up to first quarter expectations

Like-for-like turnover dropped

Gap’s total turnover dropped 3 % to 3.6 billion dollars (3.32 billion euro), while its net profit also dropped to 329 million dollars (299 million euro). That 8 % drop is partly attributed to exchange rate fluctuations.

Both its Gap and Banana Republic brands had to deal with lower like-for-like turnover. Banana Republic’s turnover dropped 8 % in the past quarter, while Gap’s dropped even more, 10 %.

Only its cheaper Old Navy brand managed positive results, with a 3 % like-for-like turnover growth. For the entire company, like-for-like sales dropped 4 %.

Art Peck, Gap’s new CEO since February 2015, saw it coming, but says he expects improvements in next year’s results. “Old Navy’s performance gives me confidence — the team has hit the right formula and they are consistently delivering a truly aspirational experience that’s resonating with customers. Gap remains a priority and we will emphasize the rediscovery of its optimism and fresh American style the brand was known for”, Peck said.