The Gap Inc. Falls On September Sales; Change In CEO

The Gap Inc. (NYSE: GPS) fell sharply in after-hours trading amid disappointing September sales news and an upcoming change in the CEO.

Gap reported that “September 2014 net sales were up 1 percent compared with last year. Net sales for the five-week period ended October 4, 2014 were $1.48 billion compared with net sales of $1.46 billion for the five-week period ended October 5, 2013.”

“Gap Inc.’s comparable sales for September 2014 were flat versus a 3 percent decrease last year. Comparable sales by global brand for September 2014 were as follows:

Gap Global: -3 percent versus +3 percent last year

Banana Republic Global: +2 percent versus -5 percent last year

Old Navy Global: +1 percent versus -2 percent last year

The company noted that it expects gross margins for the third quarter of fiscal year 2014 to be moderately below the prior year driven by underperformance at Gap brand.”

News also broke of a CEO change with the announcement “that Art Peck the president of its Growth, Innovation and Digital division, has been selected by the Board of Directors to succeed Glenn Murphy as the company’s next chief executive officer, effective February 1, 2015.”

According to the press release, “Murphy made the personal decision to retire from the company at the end of the fiscal year, allowing for a smooth and seamless leadership transition.”

Gap Inc. recently traded at $41.90, down 7.92 percent in the after-hours market.