Gap inc. GPS Shares are trading lower in Monday’s after-hours session after the company announced a CEO transition and updated its second-quarter guidance.
Gap announced that its President and Chief Executive Officer Sonia Syngal will leave his post. Bob Martinthe current Executive Chairman of Gap’s Board of Directors, will assume the role of interim President and Chief Executive Officer of Gap, effective immediately.
Gap also said it expects second-quarter net sales to decline in the mid-single digit range, which is “relatively in line” with past expectations.
Gap said it still expects to incur about $50 million in additional transitional airfreight expenses in the quarter, as well as inflationary costs on raw materials and freight. Additionally, Gap took a more aggressive approach to assortment balancing, which resulted in increased promotional activity in the quarter, which the company says will negatively impact gross margins in the quarter. . Gap now expects its second-quarter adjusted operating margin percentage to be zero to slightly negative.
Gap is expected to announce its second-quarter financial results on August 25.
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GPS Price Action: Gap traded between $32.52 and $8.15 over a 52-week period.
The stock was down 4.11% after hours at $8.40 at press time, according to data from BenzingaPro.
Photo: Michael Mozart from Flickr.