Fast Fashion Gap Sales Continued To Drop For 12 Months, Warning Of Excessive Inventory Pressure And Gross Profit.

Gap's Inc. shares fell sharply on Thursday after a very weak performance on the whole line in March, resulting in a significant reversal of group sales and a higher inventory pressure that might squeeze quarterly gross margins.

　　 Gap Inc. Cape group's overall same store sales in March dropped by 6% compared with the same period last year, which is worse than the 5% Retail Metrics forecast, which is also the twelfth consecutive month decline. The Banana Republic, the banana sold in the same store, has fallen by 14% in the same period last year, compared with 3% in the same period last year, while the old navy of Old Navy Navy, which has been supporting the group's growth, has dropped 6%, while the same period last year saw a 14% strong growth. In contrast, the group's main support Gap has improved, with the decline narrowing from 3% in the same period last year to 3%.

Jack Calandra Calandra, senior vice president of group investor relations, pointed out that the start of March was actually not bad, but Easter did not reach the preset heat. The most worrying thing was that he revealed that the decline of passenger traffic was greater than that of the same store, which could almost be judged by the future of the group.

In the first 5 weeks as of April 2nd, the net sales of Gap Inc. & amp; Cape group were $1 billion 430 million, a decrease of 6.5% over the same period last year of $1 billion 530 million. In a monthly report, the group warned the group to enter the April with higher than expected inventory, which means a discount sales promotion. This is expected to pressure the gross profit margin of the first quarter of fiscal year 2016.

Us popular clothing retailer week four fell, while Gap Inc. fell 4.05% to $27.69. The chief executive, Art Peck, has repeatedly released the signal that the group can begin its recovery in the spring. Investors' confidence has prompted the stock to benefit from a cumulative increase of 12% since 2016.

However, Morgan Stanley Morgan Stanley analyst Kimberly Greenberger last month poured cold water on it, pointing out that a strong increase of 35.5% from mid February to mid March is unable to disguise the retailer and the whole. Apparel retail industry The fundamentals of overall weakness. She believes that although the performance of Gap Inc. & amp; G group may be "not so ugly" in the short term, one or two years will still be subjected to structural resistance such as rising pay, declining clothing prices, cost cutting into stagnation, increasing customer group age and free cash flow reduction, leading to a continuous contraction in sales and gross margins.

In less than 3 weeks after Kimberly Greenberger lowered its stock rating to "neutral", Gap Greenberger lowered its rating to "lose market" again in March 16th, and the target price remained at $26. She also pointed out that if the sales of the old navy of the Old Navy and the Old Navy declined, the stock price would be further explored. In the worst case, her target price would be $15. brand Since the loss of chief executive Stefan Larsson (job hopping to Ralph Lauren Corp.) at the end of last year, sales have started to decline. In addition, the Gap Jack brand and the creative director of the Banana Republic Republic Banana Republic have all left because of poor performance.

Gap Inc. shares fell 34.9% in the past 12 months, and hit a four year low of $22.43 on 11 February.