Gap same-store sales disappoint as Old Navy struggles

Gap Inc posted quarterly same-store sales that fell short of analysts’ estimates on Thursday, as Old Navy suffered its worse comparable sales figures in three years ahead of a planned spin-off of the brand.

Shares of the company fell 2% in extended trading.

Old Navy, which offers more affordable clothing and accessories, has been a bright spot for the company in the past. But quarterly same-store sales fell 5%, much worse than the 1.11% decline Wall Street expected, according to IBES data from Refinitiv.

“We are operating in a challenging environment, but I remain confident in the strength of our brands and our plans for the future as we work to launch two independent, public companies,” Chief Executive Officer Art Peck said.

Overall, sales at the company’s Gap, Old Navy and other stores open for at least a year fell 4% in the second quarter ended Aug. 3, compared with analysts’ estimates of a 3.09% drop, according to IBES data from Refinitiv.

The San Francisco-based company said net income fell to $168 million, or 44 cents per share, from $297 million, or 76 cents per share, a year earlier.

Net sales fell to $4.01 billion from $4.09 billion.