Gap CEO ‘Not Satisfied’ With Performance in ‘Challenging’ Q1

Gap Inc. managed to show an increase in its first-quarter net profit but had disappointing sales performances across all divisions and failed to meet Wall Street expectations. Net income for the quarter reached $227 million, versus $164 million in the year-ago period, but comparable sales were down 4 percent in the last quarter compared with a 1 percent increase last year. By division, Old Nav’s global comparable sales were negative 1 percent; Gap global was negative 10 percent, and Banana Republic global was negative 3 percent. Adjusted earnings per share were 24 cents, while 32 cents had been expected. Art Peck disappointed with Gap Inc.’s first-quarter performance.  Mark Lennihan/AP/REX/Shutterstock Net sales were $3.7 billion, a decrease of 2 percent compared with last year. The translation of foreign currencies into U.S. dollars negatively impacted the company’s net sales for the first quarter by about $34 million. The company ended the first quarter of fiscal year 2019 with $2.24 billion in merchandise inventory, up about 10 percent. The company said the increase in inventory was impacted by the acquisition of Janie and Jack, increases in in-transit times, and net store growth year-over-year. “This quarter was extremely challenging, and we are not at all satisfied with our results. We are committed

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