Business

No profit (GPS) for the 3rd quarter of 2021, the forecast of reductions

A pedestrian walks past the closed GAP flagship store on August 18, 2020 in San Francisco, California.

Justin Sullivan | Getty Images

Gap Inc. Shares tumbled on Tuesday after the company cut its full-year forecast, with third-quarter financials falling short as the closure of Covid-related factories led to significant production delays this quarter.

Its shares recently fell 10% in extended trading on the news.

“As we entered the third quarter at an accelerating pace, major supply chain impediments have impacted our ability to fully meet strong consumer demand,” Chief Executive Sonia Singal said in a press release.

The Gap said it has invested in air travel to help alleviate some of the harbor congestion problems during the holidays. But this also means additional costs that will affect profits in the near future.

Here’s what the Gap looks like for the three-month period ending October 30, compared to what analysts expected using Refinitiv data:

  • Earnings per share: 27 cents (adjusted) vs. 50 cents expected
  • Revenue: $ 3.94 billion vs. $ 4.44 billion expected

The Gap said it had a net loss of $ 152 million, or 40 cents a share, compared with a net income of $ 95 million, or 25 cents a share, a year earlier.

Excluding articles, it earned 27 cents a share, less than the 50 cents analysts were looking for, according to Refinitiv.

Revenue fell slightly to $ 3.94 billion from $ 3.99 billion a year earlier. It fell short of expectations of $ 4.44 billion.

The Gap currently expects revenue for the year to grow by about 20%, less than its previous forecast of about 30%. Analysts surveyed by Refinitiv had expected 28.4% growth from the same period last year.

The Gap’s adjusted annual earnings expectations were cut to a range of $ 1.25 to $ 1.40 per share from the previous range of $ 2.10 to $ 2.25 per share. Analysts had expected the Gap to earn $ 2.20 a share, Refinitiv said.

Gap said its revised forecast includes approximately $ 550 million to $ 650 million in lost sales due to supply chain constraints and approximately $ 450 million in air travel expenses for the year.

Find The Complete Gap Income Statement here

This story is evolving. Please stay tuned.


Source link

Read More

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button