Advertisement

Gap reports wider-than-expected Q1 earnings loss

Gap shares immediately fell in after-hours trading on Thursday after the retailer reported a wider-than-expected loss for earnings. Gap reported a loss of $2.51 per share, much more than the street’s estimate of $0.66 per share. Myles Udland breaks down the company's first-quarter results on The Final Round.

Video Transcript

SEANA SMITH: All right, we got to get to some more breaking news. Gap is out with earnings here after hours. Myles has those numbers for us. Myles?

MYLES UDLAND: Yeah, let's take a look at Gap here. The company reporting a much wider than expected loss, $2.51 per share. TheStreet was looking for a loss closer to $0.66. Revenue is coming in $2.11 billion, light of what TheStreet was looking for at $2.26 billion. Now, the company did not provide comp store sales or comp sales in the current quarter. They are undertaking a strategic review of their real estate portfolio. Now, they did highlight here online sales in the first quarter were up 13% across the brands, mostly coming-- all of that coming from Old Navy and Athleta.

ADVERTISEMENT

We saw Old Navy sales online up 20%, Athleta sales up 49%. Gap and Banana Republic sales still down online, not to mention the broad declines they saw at each of their brands in-store. 90% of their stores were closed as of March 19. But the company saw online sales up 100% in May, and so stock down 4%. Everyone knows the Gap story. It's not pretty. But there are some signs within their portfolio that things are turning around just a little bit as we head through the spring here. Seana.

ANDY SERWER: Yeah, Myles, can I just jump in quickly before we go to Seana? You know, there are existential questions that have been floating around this company. I mean, let's face it, because, you know, when we saw those companies filing Chapter 11, you know, J. Crew and Neiman, you know, they were like, who's next? It reminded me of, you know, the Wall Street banks during 2008, 2009. So far, these guys are managing to stay above water. They've got a market cap of, what, I think about 4 billion, something like that.

Stocks down to 12 from 32 from a couple of years ago. But, you know, then you see something crossing the tape that caught my eye the other day, which is Simon Properties suing them for not paying rent, right? You saw that story. So-- so there's still some outstanding questions. And then we're leaving aside like, oh, the strategic problems of the company, which is to say merchandising, and, you know, staying ahead of fast fashions, the three-headed dragon of-- of, what is it, H&M? OK, bear with me. Come on. You can do this. Zara, H&M--

[INTERPOSING VOICES]

--Uniqlo. Those three.

RICK NEWMAN: All your favorite stars, Andy.

ANDY SERWER: Got to catch up. If I go there, Rick, they're dead, OK?

RICK NEWMAN: Me too.

ANDY SERWER: Right. OK, Seana, that's it for me.

SEANA SMITH: All right, guys, we're going to leave it there. But again, Gap shares under a pretty significant amount of pressure here after hours, off just over 5%.