Gap Inc forecast a full-year profit below analysts’ estimates as the apparel retailer struggles to attract shoppers to its Banana Republic stores.
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.
Gap has been trying to reduce promotions and sell more merchandise at full price. However, shoppers are increasingly looking for deeper discounts.
Chic and trendy clothes at lower prices from off-price, online and fast-fashion retailers such as H&M, Forever 21 and Inditex’s Zara are also luring shoppers away.
San Francisco-based Gap has been controlling inventories and trying to replicate the success of its low-end Old Navy brand at its Gap and Banana Republic chains.
The company’s net income fell to $125 million, or 31 cents per share, in the second quarter ended July 30, from $219 million, or 52 cents per share, a year earlier.
Excluding items, the company earned 60 cents per share, beating the average analyst estimate of 59 cents, according to Thomson Reuters I/B/E/S.
Net sales were unchanged from the $3.85 billion the company provided on Aug. 8.
Shares of Gap, which also owns the Athleta and Intermix clothing brands, were down 0.23 percent in after-hours trading on Thursday.
(Reporting by Subrat Patnaik in Bengaluru; Editing by Maju Samuel)