Gap Inc (NYSE: GPS) stock lost over 9.8% on 24th August, 2018 (As of 9:48 AM GMT-4; Source: Google finance). Gap stores posted same-store sales that fell 5 percent last quarter, which is more than double the decline projected by analysts. While gains at the Old Navy value chain helped shore up results. Comparable-store sales at the Gap brand have seen falling 2.3 percent, according to Consensus Metrix. The company has been unable to turn the unit around, with that measure falling in 16 of the past 18 quarters. At Old Navy, comparable sales rose 5 percent, compared with an estimate of a 4 percent gain. Banana Republic same-store sales of 2 percent were in line with projections. By measuring results at established stores, comparable sales are a key gauge of a retailer’s health. Gap Global Comparable sales is negative 5% versus negative 1% last year
The company ended the second quarter of fiscal year 2018 with $1.6 billion in cash, cash equivalents, and short-term investments. Year-to-date free cash flow, defined as net cash from operating activities less purchases of property and equipment, was $220 million, compared to second quarter 2017 year-to-date free cash flow of $270 million, which included approximately $59 million in insurance proceeds related to loss on property and equipment due to the Fishkill fire
GPS delivered an adjusted earnings per share of 76 cents. The company had reported the adjusted revenue growth of 35.9 percent to $4.1 billion in the second quarter of FY 18.
Gap has increasingly relied on Old Navy and its Athleta brand while it works to revive its namesake unit. In June the company named Neil Fiske as chief executive officer of the Gap brand, and his priority has been to fix problems with late deliveries that caused inventory to swell in the first quarter. That forced the retailer to resort to discounts.
Additionally, during the second quarter, the company has repurchased 3.2 million shares for $100 million and ended the second quarter of fiscal 2018 with 385 million shares outstanding. The company paid a dividend of $0.2425 per share during the second quarter of FY18, an increase of over 5% compared with last year. In addition, on August 17, 2018, the company announced that its Board of Directors authorized a third quarter dividend of $0.2425 per share.