Gap Inc (NYSE:GPS) reported weaker-than-expected results for its first quarter.
The San Francisco-based clothing maker reported Friday diluted earnings per share of $0.60 on a reported basis, and $0.24 on an adjusted basis, excluding the gain on sale of a building, costs associated with the company’s planned separation, and costs related to the previously announced specialty fleet restructuring.
CEO Art Peck said, "This quarter was extremely challenging, and we are not at all satisfied with our results. We are committed to improving our execution and performance this year.
"We remain confident in our plan to separate into two independently traded public companies in 2020, and we are focused on setting up both companies for long term value creation and profitable growth."
Net sales were $3.7 billion, a decrease of 2% compared with last year. Gross profit was $1.34 billion, a decrease of 6% compared with last year.
The company ended the first quarter of fiscal year 2019 with $2.24 billion in merchandise inventory, up about 10% year over year. The company noted that the increase in merchandise inventory was impacted by the acquisition of Janie and Jack, increases in in-transit times, and net store growth year over year.
The company ended the first quarter of fiscal year 2019 with $1.2 billion in cash, cash equivalents, and short-term investments. Year-to-date free cash flow, defined as net cash from operating activities less purchases of property and equipment, was negative $136 million compared with negative $204 million last year.
Shares collapsed $3.02, or 14.6%, to $17.58.
Related Stories
