Gap shares slip as same-store sales miss forecasts

Shares of Gap declined after the retailer said same-store sales slid at two of its largest divisions in April and missed Wall Street forecasts.

The San Francisco-based group, which also owns the Old Navy and Banana Republic brands, reported a decline of 15 per cent for same-store sales from a year earlier at its eponymous brand, in contrast to expectations for a 10.5 per cent fall.

Comparable sales at Old Navy slipped 6 per cent, while sales at Banana Republic slid 15 per cent. Analysts had forecast declines of 5.6 and 6.2 per cent respectively.

Overall same-store sales, a key industry metric, fell 12 per cent in April. The results underlined the challenge facing newly installed chief executive Art Peck.

While Gap's Old Navy division has fared relatively well recently, a dispute at West Coast ports this year left the retailer without key merchandise ahead of Easter - a busy shopping season in the US.

"We are concerned that Gap will get worse before it gets better, with material impact on the assortment not expected until next spring," said Janice Ong, an analyst at UBS.

Gap added that it expected to report fiscal first-quarter earnings between 55 and 56 cents a share.

Gap shares, which have declined 6 per cent in the past year, fell 3.79 per cent to $38.36.

Shares in Juno Therapeutics ended down 0.26 per cent to $45.46, after the biopharmaceutical company said it would burn through between $125m and $150m this year and that it had nearly $450m in cash at the end of the first quarter.

Juno, which aims to fight cancer by extracting a patient's blood and re-engineering its T-cells to fight tumours, went public late last year.

Adjusting for one-time items, including certain research and development expenses, the company reported a loss of 30 cents a share, which was narrower than forecasts for a loss of 42 cents a share.

Juno has yet to generate sales, and highlighted that in its prospectus ahead of its initial public offering late last year, but analysts say revenues could reach $335m by 2019.

Shares of Ocean Rig UDW, an international contractor of offshore drilling services, rose 13.10 per cent to $7.61, after the company reported first-quarter results that beat expectations. Ocean Rig reported profits of $41.1m or 31 cents a share, ahead of estimates for 6 cents a share. Sales rose 11 per cent to $402.1m, exceeding expectations.

Shares of Rackspace Hosting fell 13.50 per cent to $45.96, after the web hosting group forecast second-quarter sales that missed estimates. The San Antonio, Texas-based company said sales would rise between 1.5 and 2.5 per cent from the first three months of the year, shy of consensus forecasts for a 4.3 per cent gain. The company's first-quarter results were in line with expectations.

American Apparel said it would raise as much as $10m in a share sale, as its first-quarter losses widened, sending shares of the retailer 4.88 per cent lower to $0.56.

US stocks declined for a second straight day as volatile government debt markets in Europe and the US rattled investor sentiment.

The S&P 500 declined 0.29 per cent to 2,099.12, the Dow Jones Industrial Average slid 0.2 per cent to 18,068.23, and the Nasdaq Composite declined 0.35 per cent to 4,976.19.

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