Gap Net Income for First Quarter Falls

Gap announced that its profit for the first quarter had fallen by 22%, as the results for the clothing chain were hurt by a slow start for spring sales and fluctuations in foreign currency.

Nevertheless, the retailer, which has stores under its umbrella named Gap, Banana Republic and Old Navy, and is based in San Francisco , reiterated its profit outlook for the year.

Glenn Murphy the CEO and chairman of Gap said the company started the quarter disappointing but the business improved toward the quarter end. He added that the company is confident in its strategies to drive value over the long-term, as is evidenced by our reaffirmation of guidance for the full year.

As with many other retailers, Gap’s business during the first quarter was hit hard by a number of severe winter storms. However, it has fared better than its rivals such as American Eagle Outfitters that saw earnings for the quarter tumble by 86% on large markdowns that had been intended to increase foot traffic at their stores.

American Eagle announced earlier this week it would close over the following 36 months as many as 150 stores.

Nevertheless, the results by Gap underscore that the business faces challenges in maintaining momentum since it has enjoyed a turnaround since early 2012.

Gap has stepped up marketing and is offering merchandise that is trendier. Gap has also expanded outside the United States.

The company announced in April plans to more than triple its sales in China over the next three years.

Over the past fiscal year that ended February 1, Gap had $3 million in total sales in its China stores.

At the end of 2013, Gap’s stores located in China totaled 81 and earlier in 2014, it unveiled its inaugural Old Navy store in China,

Gap said on Thursday it was on scheduled to open 30 more Gap stores across China during its ongoing fiscal year.

Gap’s earnings were $260 million equal to 58 cents a share compared to $333 million, which was equal to 71 cents a share during the same period one year ago. Revenue was up to $3.7 billion an increase of 1.2%.

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