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Gap shares plunge after continued sales decline, more store closures planned

A pedestrian passes in front of a Gap Inc. store in Miami Beach, Florida.
Scott McIntyre | Bloomberg | Getty Images
A pedestrian passes in front of a Gap Inc. store in Miami Beach, Florida.

Shares of Gap plunged 16.61 percent in trade Friday after the clothing retailer reported its seventh-straight quarter of declining sales. It also said it would shut down more stores than previously expected.

On Thursday, the San Francisco-based company said its third-quarter comp sales were down 3 percent and its net sales fell 2 percent to $3.80 billion compared with the $3.86 billion last year. Earnings were in line with analysts' estimates at 60 cents a share.

The retailer said its customer traffic levels continue to be challenged amid the holiday season. Gap also said it now expects to shut down about 65 company-operated stores this year, compared with its previous forecast of about 50.

"I'm pleased to see improved product across our brands, as well as areas of healthier merchandise margins,even against the backdrop of challenging traffic trends during the quarter," CEO Art Peck said in the earnings release.

Gap expects full-year earnings in the range of $1.87 to $1.92 per share. Analysts were expecting $2.02 a share, according to Thomson Reuters consensus estimates.

Gap's stock is up more than 8 percent year to date.

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