Gap to Close 75 Old Navy, Banana Republic Stores Outside North America
Shares of the San Francisco-based company were up 4.2 percent in after hours trading on Thursday.
The store closures include all its 53 Old Navy outlets in Japan, the company said in a statement.
The company last week warned about store closures after reporting dismal first-quarter sales of its top three brands.
"Old Navy's near-term growth ambitions will be anchored in North America, including its most recent debut of company-operated stores in Mexico, as well as China and its global franchise operations," the company said in a statement.
The company said it expected the store closures to result in annualized sales loss of about $250 million but help save $275 million on an annualized pretax basis.
Gap, which also owns the Athleta and Intermix clothing brands, said it was not reaffirming its adjusted profit forecast of $2.20-$2.25 per share for 2016.
The company said "that trends in the apparel retail environment would need to improve from the first quarter" for it to achieve full-year profit of $1.92 per share estimated by analysts.
While sales of the company's Banana Republic and Gap brands have been falling for some time now, recent declines at Old Navy -- the sole bright spot in the past few quarters -- pose a bigger headache for the 46-year old retailer.
Gap's net income fell 46.9 percent to $127 million, or 32 cents per share, for the first quarter ended April 30, in line in the average analyst estimate.
Net sales were down 6 percent at $3.44 billion, the company had reported on May 9.
Up to Thursday's close of $17.28, the stock had fallen about 30 percent this year.
(Reporting by Subrat Patnaik in Bengaluru; Editing by Anil D'Silva and Saumyadeb Chakrabarty)
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