Gap (GPS) Stock Lower in After-Hours Trading, Q3 Sales Disappoint, Forecast Cut

Gap (GPS) shares are plunging in after-hours trading on Thursday immediately following the company's third quarter 2015 earnings, reported after the markets closed today.
By U-Jin Lee ,

NEW YORK (TheStreet) -- Gap (GPS) - Get Report  shares are plunging 5.92% to $23.63 in after-hours trading on Thursday, immediately following the company's third quarter 2015 earnings, reported after the markets closed today. 

Profits were in line with projections while revenue missed.

The company also cut its full-year earnings outlook. It now expects to earn between the range of $2.38 and $2.42 a share, down from its previous range of $2.75 and $2.80 a share.

For the latest quarter, the company earned 63 cents a share on revenue of $3.86 billion.

Wall Street was expecting the company to deliver earnings of 63 cents a share on revenue of $3.91 billion. 

In the same quarter a year ago, the company earned 80 cents a share on $3.97 in revenue.

Weak results were due to same-stores sales tumbling at both Gap stores and Banana Republic year-over-year, by 4% and 12%, respectively.

"With a challenging third quarter behind us, we are sharply focused on holiday execution across all channels," CEO Art Peck stated. 

Still, same-store sales at Old Navy increased 4%, better than a 1% rise last year. 

Gap is a San Francisco-based apparel and accessories company operating under the Gap, Old Navy and Banana Republic brands.

Separately, TheStreet Ratings team rates GAP INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

We rate GAP INC (GPS) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and a generally disappointing performance in the stock itself.

You can view the full analysis from the report here: GPS

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