Clothing retailer Gap (GPS) has reported mixed financial results for this year’s second quarter due to sluggish consumer spending and weakening demand.
The San Francisco-based company announced earnings per share (EPS) of $0.34 U.S. versus $0.09 U.S. that was expected on Wall Street.
Revenue in the quarter ended June 30 totaled $3.55 billion U.S. compared to $3.57 billion U.S. that was forecast by analysts. Revenue was down 8% from a year earlier.
Looking ahead, Gap is forecasting net sales to decrease in the low double-digit range for the current third quarter compared to last year’s Q3 sales of $4.04 billion U.S.
Analysts had expected Q3 sales to decline 6.8%, according to Refinitiv data.
Gap’s operations have been under pressure for numerous quarters as it struggles to hang on to market share in a difficult operating environment.
During an earnings call with analysts, Gap executives talked about a “weak environment,” “choppy consumer market” and a consumer that’s “under pressure.”
On a positive note, Gap’s gross margins rose 3.1 percentage points to 37.6% during Q2 of this year due to lower air freight expenses and a slowdown in discounting.
Gap also has a new chief executive officer (CEO) in Richard Dickson, who was previously an executive at toymaker Mattel (MAT).
Gap’s stock has declined 16% this year to trade at $9.53 U.S. per share.
