Gap down after hours

The Gap shares lower after reporting earnings after the bell.

Video Transcript

- We're going to get you some breaking news. Gap is out with earnings shares. Under a bit of pressure here after hours. Jared Blikre has those numbers for us. Jared.

JARED BLIKRE: Yeah, it was a headline miss on earnings. So I think that's why we're seeing a little bit of weakness here. Stock is down about 5% in the aftermarket. But some of the other numbers look to be doing pretty good. Excuse me, third quarter total comp sales up 5%. The estimate was for negative 2.4%

So the Street was expecting a contraction, instead we saw an expansion there. But it said headline number of EPS, that came in at $0.25. Estimate was for $0.31, $0.06 higher. And by way of reference, a year ago it was $0.37. Gross margin a bit better than estimated, 40.6%. The estimate was for 37.8%.

And then going down, there are segments and their individual brand names. Old Navy comp sales were up 17%. The estimate was for 6%. So seeing a lot of outsized strength right there, but not seeing it at Banana Republic. Because comp sales there are down 30%. The estimate was for 21%. And then you look at Gap global comp sales, those were down 5%. But that's a bit better than the Street estimated, which was to be down 7.8%.

Athleta, that's a brand that's been a ray of light for Gap over the last few years. Their comp sales were up 37%. And as for their total location count, their coming in at 3,785. That's down 3.9% year over year. The estimate was for just a bit more. And also they are maintaining their commitment to close approximately 225 Gap and Banana Republic stores globally. Net of openings in 2020.

But the big news here, kind of burying the lead, is that they have some announcements to make with regard to their C-suite, a little bit of a shakeup here. So they announced that Ashish Saxena will join the Gap. And this is going to be a senior leadership team position in a newly created position called Chief Growth Officer.

And they're going to focus on executing the company's strategic agenda, as well as leading growth initiatives for the future. And they also announced that Sondra Stungle will join Gap as the new President and CEO of Banana Republic. And they're going to try to redefine affordable luxury.

They've got some work cut out for them given that comp sales miss. But stocks still down about 5%. They did have a nice month in November, as a lot of retailer did. We'll take a quick look at the chart right now. And also year to date, trying to come back. So they're up 38% in the month, year to date, still up about 52%. Guys.

- All right, Jared Blikre, thanks so much. Gap, [INAUDIBLE] as we turn our focus to tomorrow's opening bell.