Gap Inc GPS shares are trading lower in Monday's after-hours session after the company announced a CEO transition and updated its second-quarter guidance.
Gap announced that its president and CEO Sonia Syngal will step down from her position. Bob Martin, Gap's current executive chairman of the board, will serve as Gap president and CEO on an interim basis, effective immediately.
Gap also said that it expects second-quarter net sales to decline in approximately the high-single digit range, which is "relatively in line" with prior expectations.
Gap said it still expects to incur an estimated $50 million of transitory incremental air freight expense in the quarter as well as inflationary costs on raw materials and freight. In addition, Gap has taken a more aggressive approach to assortment balancing resulting in increased promotional activity during the quarter, which the company expects to negatively impact gross margins in the quarter. Gap now expects its second-quarter adjusted operating margin percentage to be zero to slightly negative.
Gap is set to announce its second-quarter financial results on Aug. 25.
GPS Price Action: Gap has traded between $32.52 and $8.15 over a 52-week period.
The stock was down 4.11% in after hours at $8.40 at press time, according to data from Benzinga Pro.
Photo: Mike Mozart from Flickr.
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