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After swinging to a net loss in the second quarter of its fiscal year, Gap Inc. retracted its financial outlook for the year. Meanwhile, its Old Navy store struggled with the wrong mix of sizes and designs.
The San Francisco-based company, which is in the process of hiring a new CEO, withdrew its guidance for 2022 due to recent executional difficulties and unclear macroeconomic trends. Lower-income consumers, who make up a large portion of the target market for some of the company’s brands, are suffering from decades-high inflation.
The company posted a net loss of $49 million, or 13 cents per share, for the three months that ended on July 30. It posted net profits of $258 million, or 67 cents per share, a year earlier. The corporation made 8 cents per share after one-time expenses were taken out.
In comparison to the same period last year, Gap’s revenue dropped by 8% to $3.86 billion from $4.2 billion. That exceeded $3.82 billion in estimates, per a Refinitiv survey. Gap’s stock had a 7% increase in extended trading. Online sales dropped 6%, representing 34% of total sales.
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