Gap slashes forecast for earnings, shares drop

Gap reported third-quarter earnings after the market close on Thursday.

The apparel retailer cut its forecast for full-year profits, as it reported another quarterly sales decline.

Net sales of $3.86 billion were 3% lower year-on-year, and matched analysts' forecast. Gap posted third-quarter adjusted earnings per share of $0.63, in line with the consensus estimate among analysts according to Bloomberg.

Gap said it now expects full-year fiscal earnings per share to be in the range of $2.38 to $2.42.

When Gap reported monthly sales numbers earlier this month, it said weakness in the Canadian Dollar and the Japanese Yen were primarily to blame for a 3% decline in net sales.

"With a challenging third quarter behind us, we are sharply focused on holiday execution across all channels," said CEO Art Peck in the earnings statement.

Shares fell by as much as 4% in after-hours trading.

Comparable-store sales across the company - at locations open for at least one year - fell 2%, matching the decrease during the same period last year. Comp sales at Banana Republic fell 12%, while Old Navy sales dropped 4%; both worsened on a year-on-year basis and missed forecasts.