Gap cuts full-year profit forecast as dollar weighs

Thu Nov 19, 2015 5:36pm EST
 
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(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...

 
The Gap store is pictured on Fifth Avenue in New York October 8, 2009.  REUTERS/Lucas Jackson