**Gap Sales Miss Estimates, Underscoring New CEO’s Transformation Challenge**.
**New York, Feb 24 (Reuters) – Gap Inc (GPS.N) reported a bigger-than-expected drop in quarterly sales on Thursday, as shoppers reined in spending on apparel amid rising inflation and economic uncertainty.**.
The apparel retailer’s net sales fell 7% to $4.05 billion in the fiscal fourth quarter ended Jan. 28, missing analysts’ average estimate of $4.19 billion, according to Refinitiv data..
Comparable sales, a key gauge of retail performance, declined 6%, also below expectations of a 2.4% drop..
Gap shares fell 4.4% to $13.25 in premarket trading..
The results come as Gap works to revive its business under new Chief Executive Officer Sonia Syngal. Syngal, who took over the reins in March last year, has been tasked with turning around the struggling company, which has been losing market share to fast-fashion rivals such as H&M (HMb.ST) and Zara..
Syngal has outlined a plan to simplify Gap’s operations, close underperforming stores, and invest in its digital business. She has also been working to improve the company’s product assortment and marketing..
However, the company’s efforts to revive sales have been hampered by a number of factors, including the ongoing COVID-19 pandemic, supply chain disruptions, and rising inflation..
In the fourth quarter, Gap said its gross margin fell to 36.4% from 37.9% a year earlier, as the company discounted more heavily to clear excess inventory..
The company reported a net loss of $162 million, or 41 cents per share, in the quarter, compared with a profit of $255 million, or 66 cents per share, a year earlier..
Excluding one-time items, Gap earned 24 cents per share, missing analysts’ estimate of 28 cents per share..
Gap said it expects comparable sales in the first quarter of fiscal 2023 to be flat to down 3%. The company also forecast full-year comparable sales to be down in the low-single digits..
Analysts said the results highlight the challenges facing Syngal as she tries to turn around Gap..
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