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Why is Gap Inc. Stock (GPS) Down Big Today?

Image via retailingtoday.com

Legendary denim brand and normcore retailer Gap Inc. (GPS) is down over 12% in early morning trading. The clothing company announced their sales results for their multiple brands yesterday at day’s end.

Overall, net sales for the five-week period ended April 2, 2016 were $1.43 billion compared with net sales of $1.53 billion for the five-week period ended April 4, 2015.

“While March proved challenging, we remain focused on taking the necessary steps to improve results across the portfolio throughout the year," said Sabrina Simmons, chief financial officer, Gap Inc.

Gap Inc.’s comparable sales for March 2016 were down 6.5% versus a 2% increase last year. Comparable sales by global brand for March 2016 were as follows:

1. Gap Global: negative 3% versus negative 7% last year.

2. Banana Republic Global: negative 14% versus negative 3% last year.

3. Old Navy Global: negative 6% versus positive 14% last year.

The clothing retailer noted that it is entering April with more inventory than planned, which it expects will pressure its gross margin rate for the first quarter of fiscal year 2016.

Gap Inc. has a Zacks Rank #3 (Hold), and as of 10:36 AM ET, its stock is down 12.36%.

 

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