Gap Inc. (San Francisco) reports net sales decreased 1 percent to $3.30 billion, for the first quarter that ended April 30, 2011. Comparable sales, which include associated comparable online sales, dropped 3 percent.
The specialty apparel retailer says the company expects business performance during fiscal year 2011 to be heavily impacted by pressure from sourcing cost inflation, particularly in its value channels. As a result, the company has revised guidance for fiscal year 2011 diluted earnings per share to be in the range of $1.40 to $1.50.
“While we acknowledge that costing pressure is impacting our business, we’re working hard to navigate this short-term macro challenge to our profitability in the current fiscal year,” says chairman and ceo Glenn Murphy. “That said, our strategy remains the same – to deliver consistent, steady growth in North America while investing in our long-term global initiatives, especially in online and international.”
During the first quarter, the company made several organizational and operational changes, including the formation of a Gap Global Creative Center in New York, as well as the initiation of a formal search to replace the brand’s head of Adult product design. The company also combined its international operations into one, London-based division.
“We are disappointed in our quarterly performance, however remain invigorated by the opportunities ahead,” says Murphy. “We’re focused on making the necessary adjustments across the business to deliver the kind of sales we should expect from our brands.”