Gap is keeping its fiscal year profit forecast unchanged after further struggles in the second quarter. The San Francisco company also said on Thursday its plan to close 175 Gap stores in North America, as well as some locations in Europe, will cost a bit less than it expected. During the quarter, the company said it would close some Gap locations as it tries to strengthen the brand, with most of the closures coming by the end of January. It closed 26 of those stores over the three months that e
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urope, will cost a bit less than it expected.
During the quarter, the company said it would close some Gap locations as it tries to strengthen the brand, with most of the closures coming by the end of January.
It closed 26 of those stores over the three months that ended on August 1 and opened six more.
The company will also eliminate 250 positions at its headquarters.
Gap now expects $US130 million ($A177 million) to $US140 million in charges connected to those moves, down from an estimate of $US140 million to $US160 million.
Gap Inc said it expects to earn between $US2.75 and $US2.80 per share for the year. Analysts expect $US2.74 per share on average, according to FactSet.
The San Francisco company said its net income fell 34 per cent on costs related to the store closings, shipping delays on the West Coast, and the strong US dollar. Its overall sales fell two per cent, with Old Navy remaining the bright spot.
Gap said it earned $US219 million, or 52 cents per share. It said its net income totalled 64 cents per share if costs related to the store closings are excluded. Its revenue decreased two per cent to $US3.9 billion.
The results were in line with estimates Gap made last week.
AP
