Gap Inc. (GPS - Get Report) shares traded at a four-year low Friday after the struggling apparel retailer posted weaker-than-expected first quarter earnings and slashed its full-year profit outlook.

Gap said adjusted earnings for the three months ending on May 4, the company's fiscal first quarter, came in at 24 cents per share, well shy of the Street consensus forecast of 32 cents. Group revenues, Gap said, fell 2% to $3.7 billion, missing analysts' estimates of a $3.78 billion tally, while same-store sales slumped 4%, the steepest in three years, in what CEO Art Peck called an "extremely challenging" quarter.

Looking into 2019, Gap said it sees same-store sales continuing to fall at a low single digit pace, compared to its earlier view of "flat to up slightly", while adjusted earnings forecasts were trimmed to a range of $2.05 to $2.15 from a prior forecast of $2.40 to $2.55 per share.

"As you know, this is one of the coldest, wettest quarters in memory, and while traffic and sales trends improved, as we move through March and April, it was difficult to overcome the extremely slow business that we and others encountered in February," Peck told analysts on a conference call late Thursday. "In addition to the poor weather, we had late spring breaks, a late Easter and delayed and lower tax refunds thrown into the mix, as well. We also missed opportunities on our own, and we could have executed as always better across places in our brands."

Gap shares rebounded from a four-year low of $17.20 earlier in the session to trade 11% lower from Thursday's close at $18.36 each, a move that would extend the stock's year-to-date to around 35%.

Gap also said it was on track to separate its Old Navy division into a standalone business by 2020, a plan it unveiled after reporting fourth quarter earnings earlier this year.

Old Navy will be run by current brand CEO Sonia Syngal, while the Gap portion of the business will continue to be lead by Art Peck and will include Athleta, Banana Republic and Hill City brands and a projected $9 billion in annual revenues.

"While the apparel environment remains unfavorable, we would have expected stronger results in light of store closures in 4Q/1Q, which should have provided some tailwind to comp performance," said KeyBanc Capital analyst Edward Yruma. "Traffic was a major challenge for the Gap brand this quarter, so management intentionally shifted some marketing resources out of 1Q and into late 2Q and 3Q so that revamped marketing efforts could match planned improvements in product - particularly in denim."