The Gap Inc. (NYSE:GPS) reported its third quarter 2014 financial results with declining Old Navy sales and the shares of the apparel brand rallied down 4% during extended hour trading. The apparel manufacturer trimmed down its earnings forecast for 2014. At the same time, the company elected two new global brand presidents for Gap and Banana Republic.
Gap announced its third quarter 2014 financial results with net sales of $3.97 billion in the quarter and diluted EPS of 80 cents. The comparable-store sales declined by 5% at Gap Global whereas the sales were flat at Banana Republic. The major concern for the company is its 1% comparable-store sale growth for Old Navy brand, which is its primary strength in the North American apparel market, although it was the major contributor in net sales for the quarter.
The Gap Inc. (NYSE:GPS) did beat earnings expectations of 79 cents per share, as per Thompson Reuters I/B/E/S, but its sales were lower than the previous year quarter. The apparel company updated its annual earning guidance for 2014 to $2.73 and up to $2.78 range.
In addition to its third quarter announcement, the company announced two new global brand presidents for Gap and Banana Republic. Jeff Kirwan, long-term executive and Gap’s president for greater China, would become the Global President of Gap brand whereas Andi Owen, head of Gap Outlets Division, will be the Global President for Banana Republic.
Art Peck, next CEO of The Gap Inc. (NYSE:GPS), said,
“We’ll start 2015 with a management team comprised of both established executives and the next generation of brand leaders ready for the next generation of customers.”
While talking about Kirwan and Owen, CEO of Gap Inc, Glenn Murphy, said,
“These are important changes within the company, and I’ve been impressed with both Jeff and Andi’s development during our work together these past eight years. We’ve prepared leaders, with experience across all aspects of the global business, who are ready and eager for the challenges and the opportunities ahead.”
This article has been written by Prakash Pandey.