Investors are unimpressed with The Gap

The Gap Inc beat earnings… but investors still dropped the stock like a hot potato. I’ll bet you are wondering why, so let me explain – CEO Arthur Peck doesn’t know what he is doing. Well, it doesn’t appear that way, but what do I know. However, investors shared the same sentiment as shares of the retailer dropped 10% following the company’s earnings call.


Most companies are closing stores… but Gap Inc. is opening more than they are closing and their CEO is very keen on having plenty of stores. Peck said that “…most apparel is sold in stores and will continue to be sold in stores.” We are not so sure about that statement. At any rate, sales were up slightly this quarter; but the problem is, most retailers are doing much better than “slightly.”


Gap stores are the problem… because sales fell by 5% which was worse than the 1% decline last year. Old Navy and Banana Republic had increased sales which saved Gap Inc. from posting a loss on the quarter. The company plans to open 270 Old Navy and Athleta stores and close 200 Gap and Banana Republic stores over the next three years.