Gap (GPS) disclosed a weaker-than-expected 6% drop in March same-store sales on Thursday as Old Navy and the apparel maker’s namesake brand stumbled at the end of the first quarter.
Despite the disappointing sales performance, Gap reaffirmed its call for full-year earnings of $2.90 per share, compared with the Street’s view of $2.95.
“While March performance has been challenging, we remain confident in the opportunities ahead,” Gap CEO Glenn Murphy said in a statement.
Gap said its March comparable sales declined 6%, trailing forecasts from analysts for a more modest slide of 4.1%. The year-earlier period saw a 1% dip in sales. Both Gap brand and Old Navy sales slumped 7% last month, while Banana Republic saw a 4% reduction in sales.
Gap reiterated that the later Easter holiday negatively impacted sales.
Looking ahead, Gap said it expects gross margins in the first quarter to contract year-over-year by more than they did in the fourth quarter of last year. Management also said it expects 2014 operating expenses to be flat.
Shares of San Francisco-based Gap dropped 2.44% to $38.32 in after-hours trading on Thursday, building on a 1.75% during regular trading that outperformed the broader markets.