Gap Plunges After Warning About Sales Decline, Potential Streamlining

Gap Inc. shares fell more than 9% Monday afternoon after the clothing retailer warned of a sales decline in the first quarter and said it is looking to streamline its operations. Specifically, the retailer said it is examining Banana Republic and Old Navy stores globally, but primarily outside North America, for potential changes. The clothier said that April sales declined to $1.12 billion from $1.21 billion year-over-year, and first-quarter sales fell to $3.44 billion from $3.66 billion. Profit in the first quarter is expected to be 31 to 32 cents per share. Analysts polled by FactSet expected Gap to report earnings of 44 cents a share on sales of $3.54 billion. Gap last year announced a streamlining of its namesake retail chain, with plans to close more than a quarter of those stores, and appears ready to make a similar move with its other clothing store chains. "Our industry is evolving and we must transform at a faster pace, while focusing our energy on what matters most to our customers," Chief Executive Art Peck said in Monday's announcement. Shares fell lower than $20 in late trading after closing with a 0.7% gain at $21.81. Gap plans to fully report first-quarter earnings on May 19.