Gap Inc (GPS.US) stock tumbled nearly 20.0% during today's session after the clothes retailer slashed its sales guidance due to "macroeconomic dynamics as well as the execution challenges at the Old Navy brand," increasing competition, supply chain issues and large number of promotions.
- Gap also announced that Old Navy President Nancy Green is leaving the company with CEO Sonia Syngal assuming control until a permanent replacement is found. One need to remember that any major change in management is usually a warning sign for investors.
- Gap cut its fiscal 2022 net sales growth guidance to "low to mid-teens year-over-year declines", in percentage terms, down from a March forecast of mid- to high-single-digit declines. GAP did not refer to the full-year outlook, which includes adjusted earnings in the region of $1.85 to $2.05 per share.
- Company will provide updated fiscal 2022 guidance when the company reports its first-quarter financial results on May 26 and investors should prepare for more volatility especially if the new forecasts differ significantly from the previous ones.
Gap Inc (GPS.US) stock launched today's session with a bearish price gap and may be heading towards local support at $9.95 where lows from June 2020 are located. This level also coincides with the lower limit of the descending channel. Source: xStation5
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