Apparel retailer Gap reported lower-than-expected quarterly sales at its established stores. The company was specifically hurt by weak demand from its Banana Republic and Old Navy brands.
The company’s shares fell by 10% in extended trading on Monday.
Gap has suffered to stay relevant in an industry that is now dominated by fast fashion stores such as H&M, Forever 21, and Zara. The company has also suffered from various fashion misses in recent months.
“The company is identifying opportunities to streamline its operating model to be more efficient and flexible,” Gap said in a statement.
The company estimated a profit of $0.31 to $0.32 a share for the first quarter. Analysts on average had expected $0.44.
Comparable sales at Banana Republic fell by 11% and suffered from a fifth straight quarter decline.
Old Navy sales slipped by 6% and Gap sales dropped off by 3%.
Established store sales fell by 5% in the quarter. Analysts on average had expected a decline of 2.6%, according to the research firm Consensus Metrix.
Net sales at Gap were down 6% to $3.44 billion, missing an average of $3.54 billion.
The company is scheduled to report first-quarter earnings on May 19.