Gap backs annual profit forecast after retailer confirms net income, sales fell in 2Q

MarketsAssociated Press

Gap is keeping its fiscal-year profit forecast unchanged after the retailer confirmed it continued to struggle in the second quarter, with sales rising at its Old Navy stores while business at Gap and Banana Republic stores weakened.

The San Francisco company also says its plan to close 175 Gap stores in North America, as well as some locations in Europe, will cost a bit less than it expected.

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Gap's net income fell 34 percent on costs related to store closings, shipping delays on the West Coast, and the strong U.S. dollar. Its revenue fell 2 percent. The results were in line with estimates Gap gave last week.

Gap Inc. expects to earn between $2.75 and $2.80 per share for the year. FactSet says analysts expect $2.74 per share on average.