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Gap's Latest Quarter of Falling Sales Signals More Store Closures Ahead

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After a horrible first-quarter showing because of continued fashion miscues, Gap (GPS - Get Report) may be looking to take some drastic actions to protect its profit.

The company reported on Tuesday that sales in the first quarter fell 6% year over year to $3.44 billion, badly missing forecasts for $3.66 billion. Gap said it expects earnings in the quarter of 31 cents a share to 32 cents a share, well below analysts' forecasts of 44 cents. The company oddly left its full-year earnings guidance of $2.20 to $2.25 a share unchanged, but that will likely be lowered when it reports earnings on May 19.

Gap once again saw stunning sales declines in the quarter. Same-store sales at Gap fell 3% despite an overhaul of the look of the company's merchandise this spring. Same-store sales at Banana Republic and Old Navy declined 11% and 6%, respectively. Trends didn't improve in April, either. Same-store sales at Gap declined 4% in April, with respective drops of 7% and 10% at Banana Republic and Old Navy.

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