Gap's shares dropped in after-hours trading after the retailer reported a sales slump that extended into December that included even Old Navy, once a bright spot for the company.
The San Francisco-based clothing retailer, which also operates stores under its own brand as well as Banana Republic, said Thursday that a key sales measure fell 5 percent for the five-week period ended Jan. 2. The decline was worse than the 3.5 percent drop analysts surveyed by Thomson Reuters expected, on average.
By division, the key revenue measure at Gap fell 2 percent, while Banana Republic posted a 9 percent drop. However, what's more worrisome is that Old Navy, which had been a juggernaut, suffered its second consecutive monthly sales drop. It saw sales fall 7 percent in December, after a 9 percent drop in November.
The metric is based on revenue at stores opened at least a year. The company's total revenue dropped 4 percent to $2.01 billion for the five-week period.