Gap Net Sales Fell 3% In The Third Quarter.

The Gap Group expects annual sales losses of about $300 million to be related to store closures. Annual savings from 2016 will be reduced by about $25 million.

American clothing company Gap group Recently, it revealed some third quarter results, which was dragged down by the weak performance of its brand Banana Republic. Its same store sales in October dropped by 3%, of which Banana Republic fell 15%, Gap dropped 4%, Old Navy edged up 2%. After the news came out, the company's share price fell 5.7% to 26.10 dollars.

As of the third quarter of fiscal year 2015, the total sales of the company fell by 2%, and the adjusted diluted earnings per share were 0.62-0.63 dollars. Analysts had forecast earnings per share of $0.66. On a constant monetary basis, Gap's net sales in the third quarter fell by 3% to $3 billion 860 million.

Sabrina Simmons, chief financial officer, said: "with our backwardness, our investment team will focus on the strong execution during the holidays."

In fact, the retailer has gone through a difficult period. Fitch international Rating firm Fitch Ratings recently cited a series of changes in the company and regarded it as "a common concern about current and future business trends." The Gap credit rating will be "BBB-minus", leaving Gap group at a critical juncture, at a non investment level or junk bond status. If the company's debt is downgraded, it will have the opportunity to become more expensive in order to prepare funds.

Gap group has constantly changed top management, including Old Navy global president Stefan Larsson has left the company and transferred to Ralph Lauren group. Chief executive officer Banana Republic creative director Marissa Webb has removed the position of creative director, but will continue to serve as brand creative consultant.

The rating agency said: "the company does not expect any brand of Gap to have positive sales growth. If Gap's brand stores do not improve at the same time, the weakness of Old Navy will have negative tax depreciation and profit before amortization. In addition, the departure of Banana Republic creative director indicates that the weak trend of the business will continue at least in the next six to nine months, and the product line under her guidance does not resonate with customers. "

In addition, the Gap group has added a value of 400 million US dollars in regular loans, which will be used for repurchase shares. In the next few years, 175 Gap shops will be closed in North America, including 140 shops closed down this year and 250 layoffs, most of which are targeted at headquarters in San Francisco. The Group expects annual sales losses of about $300 million. Shop closure The annual savings from 2016 will be reduced by about US $25 million.

Gap group will announce its third quarter earnings report in detail in November 19th.