By Sabela Ojea

Gap sees slow growth ahead as it deals with cautious consumers, supply- chain disruptions and foreign currency volatility.

The San Francisco apparel company behind Old Navy, Banana Republic and its namesake brand on Thursday said it projects first-quarter sales to be flat to up slightly. Full-year sales are expected to rise between 1% and 2%.

Analysts polled by FactSet had forecast first-quarter sales to grow around 1.5% to $3.44 billion and full-year sales to rise around 1.7% to $15.26 billion.

"We're obviously watching the consumer, like everyone else is," Finance Chief Katrina O'Connell said. "There's a lot going on and we are operating in a highly dynamic backdrop, but we've been operating in a highly dynamic backdrop for years now."

O'Connell added that its outlook was also hit by a cold February but that, as the weather normalized, the company is seeing better results.

The retailer expects to close 35 stores during the fiscal year, most of which will be Banana Republic stores.

For the fourth quarter ended Feb. 1, Gap posted a net profit of $206 million, or 54 cents per share, compared with $185 million, or 49 cents a share, for the same period a year earlier.

Quarterly revenue fell 3.5% to $4.15 billion, but came ahead of Wall Street expectations of $4.07 billion, according to FactSet.

Gap said in November that its holiday season was off to a strong start, but reported a 5% decline in Athleta sales, and a 4% drop in Banana Republic sales in the period. Gap and Old Navy followed with sales declines of 3%.

"These strong results are underpinned by the momentum we're seeing in our operational execution, our culture and the reinvigoration of our brands as they climb in the cultural conversation," Chief Executive Richard Dickson said.

Write to Sabela Ojea at sabela.ojea@wsj.com

(END) Dow Jones Newswires

March 06, 2025 16:20 ET (21:20 GMT)

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