Gap affected by strong dollars and delays at US West Coast ports

Friday, 27 February 2015
Gap Inc.’s fourth-quarter revenue grew by 3 percent, lifted by improved sales at Old Navy stores that helped offset a drop-off at the company’s namesake brand. Now, Gap Inc (GPS.N) forecast a drop in full-year profit, alluding to a strong dollar, shipment delays due to disruptions at US West Coast ports and declining sales at its flagship Gap brand.


The retail group highlighted that Gap gets over 22 percent of its sales from abroad so the strong dollar might reduce full-year profit by about 16 cents per share. In this vein, Reuters reminds that the dollar is forecast to gain across currencies this year, being expected to rise nearly 10 percent in 2015.

Likewise, the San Francisco based company said it expects merchandise delays due to labour issues at West Coast ports to reduce full-year profit by about 13 cents per share.

On a separate note, Gap Inc also approved a 1 billion dollars share buyback program. The stock rose 3 percent in after-market trading on Thursday.

Also at the down was Abercrombie & Fitch (ANF), which shares traded down 4.06 percent to 23.85 dollars in mid-morning trading Thursday, after the teen apparel retailer was downgraded to ‘underweight’ by analysts at Morgan Stanley in the morning.

Elsewhere, Ross Stores, Inc. (ROST) saw its shares surged nearly five percent in extended trading on Thursday after the discount apparel retailer reported results for the fourth quarter that topped analysts' expectations.

The company reported a profit for the quarter that grew 14 percent from last year, reflecting improved operating margins and double-digit net sales growth. Based on these figures, Ross Stores provided guidance for the first quarter and full-year 2015 and increased its quarterly dividend 18 percent and approved. Finally, the retailer announced a 1.4 billion dollars share buyback program.

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