Written by Alex Barreira
Gap Inc. stock sunk in after-hours trading on Thursday after the San Francisco retailer reported sales a 43% drop in first quarter sales.
Driven by Covid-19-related store closures, Gap finished with $2.11 billion in revenue, down from $3.71 billion a year earlier. Analysts had estimated revenue would be about $2.3 billion. The company saw a $1.24 billion operating income loss, compared with a $316 million profit in the first quarter last year.
Like other retailers, Gap has suffered severely during the pandemic and has been looking for areas to cut costs. Gap’s stock price has dropped about 70% since October. Gap stock was down 3.8% at $11.68 in after-hours trading.
The company did not provide guidance, citing uncertainty during the pandemic, but CEO Sonia Syngal said the company plans to reduce capital expenditures for the fiscal year by half. It will also be scrutinizing its real estate portfolio to advance priorities for “a smaller, healthier fleet.”
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