Gap Inc. had a rough trading week after announcing it cut the forecast of its annual sales and profit. On Friday, shares in the fashion retailer fell 7 percent early morning, increasing to over 15 percent in extended trading.
So far this year Gap’s value has plummeted 37 percent according to Reuters. Gap stated the rising costs of transport and deeper discounts at Old Navy lagged its first-quarter gross margins, forcing it to adjust its yearly outlook.
“Growth at Gap Brand was also negatively impacted by the Covid-related forced lockdowns and slowed overall demand in China,” the company said in a statement.
Gap, which also operates Old Navy, Banana Republic and Athleta, expects performance to improve in the second half of 2022 and accelerate in 2023.
In April shares in Gap Inc fell after one of Old Navy’s executives left the company and the group cited similar supply chain and rising costs issues. Last November the company saw its shares fall 24 percent, the biggest loss in its trading history.