Struggling clothing retailer Gap lowered its full-year earnings forecasts as it failed to entice more customers into its shops.
The California-based company now expects adjusted earnings per share of $1.87-$1.92 for this year, down from its previous guidance of $2.20 to $2.25.
It came as the company reported net income fell to $125m in the second quarter ended 30 July, or 31 cents per share. This was down from $219m, or 52 cents per share, a year earlier. Adjusted diluted earnings came in at 60 cents per share.
Gap's comparable sales fell two per cent during this period, flat compared to a year ago. Gap Global fell three per cent, while Banana Republic slumped nine per cent and Old Navy Global came in flat.
Its stores have suffered as customers increasingly prefer to shop online, while it also faces stiff competition from fast-fashion outfitters such as H&M and Forever 21.
Art Peck, chief executive officer, said: "During the quarter, we took critical steps to execute our restructuring plans and to build a more efficient global brand model with greater potential for growth."
He continued: "While I remain unsatisfied with the pace of improvement across the business, I am encouraged by the underlying signs of progress in the second quarter, as demonstrated by healthier merchandise margins."
"Our management teams share my urgency to create fundamental change that will drive long-term performance."