Gap (NYSE:GPS) tumbled in premarket trade, a day after the apparel retail company provided disappointing guidance on its expected profitability in the current quarter while reporting a 1% drop in total sales in September.
Shares were trading lower 6.2% as of 8:14 a.m. in New York. The stock had retreated 31% since the beginning of the year through the close of trading on Thursday.
Gap now expects its gross margin rate for the third quarter to be similar to the second quarter, the San Francisco, California-based company said in a statement late on Thursday. In the July quarter, Gap had a gross margin of 37.4%; analysts were predicting 39.6% for the current quarter.
Total sales for the five weeks ended October 3 was $1.46bn, down from $1.48bn a year ago.
Chief Financial Officer Sabrina Simmons described September as “challenging” in the statement.
At the company’s different brands, same-store sales were flat at the namesake Gap stores, fell 10% at Banana Republic and rose 4% at Old Navy.
The company has long been grappling to turn around its Gap namesake business and improve business at Banana Republic.