Gap's profit forecast misses as Banana Republic remains weak
By Subrat Patnaik
(Reuters) - Gap Inc (GPS.N: Quote) forecast a full-year profit below analysts' estimates as the apparel retailer struggles to attract shoppers to its Banana Republic stores.
The company has been working on refreshing its Banana Republic line of clothing, but comparable sales at the company's third-biggest brand fell for the sixth straight quarter as its merchandise did not resonate with shoppers.
"The assortment is at the heart of Banana's issues and symbolizes a brand that has simply lost its way," Neil Saunders, chief executive of research firm Conlumino, said.
"Customers are confused and, of course, increasingly unwilling to pay the premium that Banana once commanded."
Gap forecast a full-year adjusted profit of $1.87-$1.92 per share. The company had earlier forecast a profit of about $1.92.
Analysts on average were expecting earnings of $1.96, according to Thomson Reuters I/B/E/S.
MERCHANDISE MARGINS INCREASE Continued...