Gap, Inc. (NYSE:GAP) shares are trading lower Friday after the company reported worse-than-expected fourth-quarter financial results on Thursday after the market closed.
Double Miss As Comparable Sales Grow
Gap reported earnings per share of 45 cents, missing the consensus estimate of 46 cents. In addition, the company reported revenue of $4.23 billion, missing the consensus estimate of $4.24 billion.
Comparable sales increased 3%, marking the company's eighth consecutive quarter of positive comparable sales. Online sales increased 5% from last year and represented 42% of total net sales.
"I am pleased to report that Gap Inc. delivered a successful fourth quarter, marking another year of meaningful progress," said President and CEO Richard Dickson.
Old Navy reported net sales of $2.3 billion, up 3% year over year with comparable sales also rising 3%. Gap brand net sales totaled $1.1 billion, increasing 8% from last year with comparable sales up 7%. Banana Republic posted net sales of $549 million, up 1% year over year with comparable sales rising 4%. Athleta reported net sales of $354 million, down 11% from last year with comparable sales declining 10%.
Gap ended the year with $3.0 billion in cash, cash equivalents and short-term investments.
The company also announced that its board approved a new $1 billion share repurchase authorization for its common stock. Gap said it will pay a first-quarter fiscal 2026 dividend of $0.175 per share, representing about a 6% increase from the prior quarterly dividend.
Looking ahead, the company sees fiscal-year adjusted earnings per share of $2.20 to $2.35, versus the consensus estimate of $2.32. Furthermore, it expects revenue of $15.70 billion to $15.86 billion, versus the consensus estimate of $15.75 billion.
For the first-quarter, the company anticipates revenue of $3.53 billion to $3.57 billion, versus the consensus estimate of $3.53 billion.
Gap Shares Fall
GAP Price Action: At the time of publication, Gap shares are trading 9.52% lower at $24.61, according to data from Benzinga Pro.
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