Gap cuts full-year profit forecast as dollar weighs
(Reuters) - Apparel retailer Gap Inc (GPS.N: Quote) cut its 2015 profit forecast, hurt by a strong dollar and weak sales at its Banana Republic and Gap brands but Chief Executive Arthur Peck said the brands would see a material improvement in spring.
A series of fashion misses, particularly in women's merchandise, have turned shoppers away from the Gap brand toward competitors such as American Eagle Outfitters Inc AEO.N, H&M, Forever 21 and Inditex's (ITX.MC: Quote) Zara.
Gap cut its 2015 adjusted profit forecast to $2.38-$2.42 per share from $2.75-$2.80.
Net income fell to $248 million, or 61 cents per share, in the third quarter ended Oct. 31, from $351 million, or 80 cents per share, a year earlier.
Excluding items, the company earned 63 cents per share.
Revenue fell about 3 percent to $3.86 billion, the company said on Nov. 9.
The strengthening of the dollar, particularly against the Japanese yen and Canadian dollar, hit sales by about $100 million in the third quarter, the company said on Thursday.
The company had earlier expected an impact of $98 million.
Gap received about 23 percent of net sales from outside the United States in the quarter. Continued...