Gap earnings miss, stocks tumble
Operating expenses rose about 8% in the quarter while E-commerce sales jumped 61%
Stocks impacted: Gap Inc (GPS)
The apparel maker’s profit fell short of expectations in the third quarter despite sales gains at Old Navy and Athleta outweighed by higher spending on marketing. Gap announced earnings per share of $0.25 on revenue of $3.99 billion versus $0.3132 on revenue of $3.8 billion expected. Online sales surged 61% in the third quarter, helping Gap report a surprise rise in comparable sales. At the same time, operating expenses rose about 8% in the quarter while E-commerce sales jumped 61%. The company also said it expects fourth-quarter sales to be flat or slightly higher than last year. Given the recent rally in stocks, investors might have been hoping for stronger results, the apparel retailer's shares were down about 11% in extended trading on Tuesday and could suffer further losses today.
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