The Gap Inc. (GPS - Free Report) reported dismal first-quarter fiscal 2019 results, wherein earnings and sales missed the Zacks Consensus Estimate and declined year over year. The dismal results mainly reflected soft top-line growth and comparable sales (comps) as well as lower margins. Furthermore, management lowered its earnings outlook for fiscal 2019.
The company also noted that the Trump administration’s recently announced intent to impose tariffs on clothing goods produced in China may impact results going forward. Gap stated that its current guidance incorporates impacts from List 3 goods but does not include any potential tariff impacts from List 4 goods.
Following the dismal quarterly results, soft outlook and uncertainty surrounding the impacts from tariffs, shares of Gap decreased significantly in the after-hours trading session on May 30. In the past three months, this Zacks Rank #3 (Hold) stock has lost 27.3%, wider than the industry’s 25.6% decline.
In the fiscal first quarter, Gap’s earnings of 24 cents per share missed the Zacks Consensus Estimate of 31 cents. The bottom line also declined nearly 42.9% from 42 cents registered a year ago. Quarterly earnings included currency tailwinds of 1 cent per share.