NEW YORK--Shares of Gap Inc. continued on a downward trend Tuesday after NatWest Securities analyst Robert Buchanan forecast weak September sales and cut his earnings estimates for the year.
The stock closed down 1 to 31 1/8 Tuesday on the New York Stock Exchange. On Aug. 31, just prior to the September 1 report on monthly sales, the stock was at 43.
"September looks like another weak month for profits and sales," said Buchanan, although he projects same-store sales for September might be a little better than the 5 percent decline reported for August. In addition, "Given how slow business is, the company is probably getting hit on margins."
For the fiscal third quarter ending Oct. 30, Buchanan cut his estimate to 57 cents a share from 64 cents, against 54 cents a year ago. For the year, he reduced his estimate to $2.10 from $2.26, against $1.77 last year.
Looking ahead, Buchanan said, "They're beautifully positioned for the long term," and should be helped by the Old Navy Stores. "Yes, they will come back, but it's anybody's guess when," he noted, adding, "Fall sets the tone for holiday," which right now does not look very promising.
--Fairchild News Service

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