(Updates with share price in fifth paragraph.)
Feb. 23 (Bloomberg) -- Gap Inc., the largest U.S. apparel chain, forecast profit this year that was less than some analysts estimated as sales decline at its Old Navy stores.
Profit in the year ending in January 2013 will be $1.75 a share to $1.80 a share, San Francisco-based Gap said today in a statement. The average estimate of 31 analysts surveyed by Bloomberg was $1.80.
Chief Executive Officer Glenn Murphy failed to boost holiday sales at Old Navy after introducing a new marketing campaign for the more-than-1,000-store chain during the third quarter. The company yesterday said former Nike Inc. executive Jill Stanton will become creative adviser for Old Navy, which lost president Tom Wyatt last month.
“Old Navy is at the essence of the issue with Gap,” Craig Johnson, president of Customer Growth Partners in New Canaan, Connecticut, said in a telephone interview before results were announced. “They’ve made some cosmetic changes, but it’s going to have to be more radical to save the brand.”
Gap rose 0.3 percent to $23.60 at 4:11 p.m. in New York. The shares fell 16 percent last year.
Fourth-quarter net income fell 40 percent to $218 million, or 44 cents a share, from $365 million, or 60 cents, a year earlier, the company said. Analysts projected 42 cents, the average of 28 estimates compiled by Bloomberg.
Comparable-store sales at North American Old Navy locations and associated online sales fell 6 percent in the quarter, compared with a 4 percent decline for the company overall.
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