said on Thursday that its January same-store sales fell 12%, thanks to markdowns designed to move merchandise, and the retailer lowered its fourth-quarter earnings forecast.
Wall Street was looking for the company's same-store sales to decline 6.2%, but individual analysts' estimates ranged from a 2% decline to a 12.7% dropoff, according to
First Call/Thomson Financial
Shares of Gap fell $2.63, or 8.9%, to $26.93 in recent
New York Stock Exchange
The company said same-store sales for its
brands all fell. While the company didn't provide exact numbers, Gap said Old Navy declined the most, falling by more than 20% in January from the year-ago period.
"From a comp and margin perspective, each of our brands fell short of our forecasts. To clear merchandise, we took deeper markdowns than anticipated. That resulted in total merchandise margins falling below last year's level," Gap said in a statement.
The retailer also lowered earnings estimates to between 30 cents and 31 cents for the fiscal fourth quarter. In January, the company said earnings may be between 31 cents and 33 cents. Twenty-seven analysts polled by First Call are calling for the company to post earnings of 33 cents in the quarter, below the 47 cents it earned in the year-ago period.
"Going into fiscal 2001, uncertainty in consumer spending and a promotional retail environment will continue to pressure our sales and margins. As a result, we expect the negative mid-single digit comp trends we experienced in fourth quarter 2000 to continue in first quarter 2001."
Total sales for the five weeks ended Feb. 3 rose 31% to $938 million from $719 million in the year-ago period.