Gap: shares slump after 'extremely challenging' quarter
(CercleFinance.com) - The shares of US clothing chain Gap slumped over 15% on Friday after the company said that it had an "extremely challenging" quarter.
The company's first-quarter comparable sales were down 4%, with net sales of 3.7 billion dollars, dropping 2% year-on-year.
In its statement, Gap said it now expects comparable sales for fiscal year 2019 to see a low single-digit drop.
Analysts at Jefferies, who have a "buy" rating on the stock, with a target price of 40 dollars - said "poor weather hurt traffic trends and Gap brand came in much weaker."
"While May weather hasn't been great, we see second-half comp and margin trends improving and anticipate results improving from here," Jefferies wrote in a note.
On a sum-of-the-part basis, there's room for the shares to double, it added.
However, the market did not seem to share this point of view - quite the contrary - with the San Francisco based group's share price tumbling 15% to 17.5 dollars.
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