Profit and sales at Gap took a tumble in the fourth quarter of its financial year, as the troubled clothing chain offered a weaker than expected outlook for 2016.
The US-based group reported profits of $214m (£154m) for the three months to January 30, down from $319m (£230m) on the same period a year ago. Sales fell 7% to $4.39bn, in line with analysts’ expectactions of 57 cents on revenue of $4.46bn (£3.2bn).
The retailer does not split out UK sales, but revenues for Europe reached $221m (£159.3m), down from $241m (£173.8bn) the year before.
Comparable-store sales fell 7% in the fourth quarter compared with the previous year. Gap global sales were down 6%, Banana Republic’s fell 10% and Old Navy’s remained flat.
The retailer said the translation of foreigh currencies into US dollars negatively impacted met sales by around $363m (£261.8m).
For 2016, the clothing retailer said it expects earnings to fall in a range of $2.20 to $2.25 (£1.59-£1.62) per share – a drop from $2.43 (£1.75) per share in 2015 and below analysts’ expectations, also $2.43 (£1.75).
“With a year of transition behind us, I’m confident that we have the right stratgeies in place to fuel our long-term growth,” said Art Peck, chief executive of Gap. “We’ve made significant progress in 2015 transforming our product-operating model, enabling us to be more responsive to trends and market conditions, and consistently deliver on-brand product collection.”
He added: “Our brands are strengthening their connections with customers through digital, and especially mobile enhancements that create richer experiences whether shopping online or in stores, or any combination of channels.”
The retailer said Gap had made significant progress with its transformation agenda, and actions were in place to create a smaller and more vibrant stores.