NEW YORK, NY / ACCESSWIRE / May 22, 2017 / Foot Locker shares took a hard fall on Friday after the company missed expectations with its first quarter earnings report and cited delayed income tax refunds. Gap may have done well in the first quarter, but negative comments from GlobalData Retail drove the stock lower.
Foot Locker, Inc.
The Gap, Inc.
Foot Locker, Inc. took a beating on Friday, closing down 16.65% after releasing a Q1 report that missed forecasts. The sport apparel retailer hit a nine-month low on Friday after reporting EPS of $1.36 on revenue of $2 billion. The Street had been looking for an EPS of $1.38 on revenue of $2.015 billion. Same-store sales also came in below what the consensus estimate had called for. The company blamed income taxes for the miss with CFO Richard Johnson commenting, "The slow start we experienced in February, which we believe was largely due to the delay in income tax refunds, was unfortunately not fully offset by much stronger sales in March and April." Last week was the worst week of the year for Foot Locker shares. Shares are down 17.17% year to date.
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Gap Inc.'s shares closed down 3.92% on Friday after the stock rallied late Thursday when the retailer announced its Q1 results. While many retail stocks saw their worst year of the year last week, Gap surprisingly did very well in the first quarter. The company reported sales of $3.44 billion, which was ahead of the $3.39 billion that FactSet had expected. EPS of 36 cents was also ahead of the 29 cents that FactSet looked for. So what was the problem? Why did shares go down on Friday? Apparently GlobalData Retail doesn't think the earnings were strong enough as they depended too much on Old Navy. Same-store sales for the period grew 2% and saw an 8% increase just from Old Navy while Gap and Banana Republic fell 4%.
Neil Saunders of Global Data Retail explained, "Unfortunately for Gap, the group's progress is all down to Old Navy. This imbalance means that Gap is firing on just one cylinder. More worryingly, it also undermines the group's contention that improvements to styling, quality and fit are delivering results. On the contrary, we believe that Gap and Banana Republic are still brands in search of a purpose and identity." Gap shares are up over 21% in the past year.
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