California, US (BBN)-Clothing chain Gap has admitted it needs to move faster to compete with rivals as it warned first quarter earnings would miss forecasts.
First quarter like-for-like group sales, which exclude new stores, fell 5 per cent, below last year’s 4 per cent fall, reports BBC.
It now expects earnings of 31 to 32 cents a share, below Wall Street expectations of 44 cents a share.
Gap boss Art Peck said the firm “must transform at a faster pace”, and wanted to “streamline its operating model”.
Mr Peck, who took the helm last year, said the group also planned to evaluate the Banana Republic and Old Navy shops it had outside North America, with the intention of “sharpening its focus on geographies with the greatest potential”.
For the quarter, the company said by brand like-for-like sales fell 3 per cent at Gap, 11 per cent at Banana Republic and 6 per cent at Old Navy.
Total sales for the quarter fell to $3.44bn from $3.66bn.
Mr Peck had promised that spring would prove the turning point for the firm, which has struggled to compete with High Street rivals such as H&M and Zara.
But the firm said the weaker-than-expected store traffic, which began in March had continued into April.
Gap shares, which have already fallen almost 45 per cent over the past year, dropped over 12 per cent in after-hours trading.
The firm said it would give more details of its plans to improve sales at its 19 May earnings announcement.