Banana Republic sales drop hits Gap Inc's stock on Wall Street

The Gap Inc (Gap Inc) share fell over five percent to $27.69 and later rebounded to $28.45 a share on funds buying support on New York Stock Exchange (NYSE).

The forecast is showing weaker than expected results for quarter ending October. The significant drop in retail sales in October more at Banana Republic has dampened the business confidence. Banana Republic brand sales dropped 15 percent during the quarter.

The projected earnings of 62 cents a share are lower than previous prediction of 66 cents per share. Gap Inc is planning restructure its operations to enhance profitability, sales volume and cut down costs.

The Gap Inc, the US-based multinational clothing and accessories retailer, has over 3,700 stores under the brands Old Navy, Banana Republic, etc. Gap Inc's sales fell three percent to $3.86billion missing the Wall Street forecast of $3.93 billion.

However, the sales were flat on constant currency basis. The sales of the Banana Republic and Gap brands fell 15 percent and four percent, respectively, while Old Navy brand sales rose two percent.

Following recent fashion mist-hits, Gap shares slipped into pressure. On the other hand, the sales volume is also declining, putting more pressure on the retailer.

The head of Old Navy division, which is encouragingly performing, left the organization to take over Ralph Lauren Corp.

Gap Inc shares rebounded to $28.45 a share on buying support from funds. It's estimated that $4.11 million worth transactions took the share price upticks. However, there's $14.88 million made its way out via downticks.

The net money outflow stands at $10.76 million while up/ down ratio is 0.28. On weekly basis, share price fell 4.52 percent. A block trade worth $10.59 million was recorded.

The upticks' composite value was $0.42 million and downticks' total value of $11.01 million. According to the information on insider buying and selling to Securities Exchange (SEC), Fisher William, who owns 10 percent in Gap Inc, has bought 4,929.504 shares on 28 August 2015 at price of $32.99 and total disclosed transaction value was at $162,624,337.

Gap Inc is also anticipating inventory dollars per store on year-on-year basis would be lower than previously predicted. Without considering the newly opened and closed locations, the sales dropped in October on top the three percent fall in 2014.

According to analysts at Retail Metrics, there may be 0.6 percent drop in sales and they stated that the sales have been declining for the past seven months in a row.

Gap Inc's sales for October month were $1.20 billion when compared to $1.26 billion in the previous corresponding month.

The net sales projected during the third quarter of 2015 fell three percent to $3.86 billion from $3.97 billion in the third quarter of 2014.

Gap Inc is scheduled to announce earning numbers for the third quarter on 19 November.