Gap's 4th Quarter Profits Fall 33 Percent On Currency Headwinds

SAN FRANCISCO (CBS / AP) -- Gap reported a 33 percent drop in fourth-quarter profits as business was hurt by currency headwinds and strategic moves to turn around its ailing business.

The company, which operates stores under its namesake, Banana Republic and Old Navy, also issued an annual profit forecast that is below Wall Street estimates.

The results, announced after regular trading on Thursday, show the continued challenges that CEO Art Peck, who took over the helm a year ago, faces in turning around the business. The company has worked to improve its fashions and trimmed its fleet last year. But it hasn't been able to get shoppers to buy without offering a fat discount. Even Old Navy, until recently a bright spot, has seen its business falter in the last few quarters.

The company has also had some management upheaval. Last fall, Old Navy President Stefan Larsson, who spearheaded the growth of Old Navy, resigned to take the CEO job at Ralph Lauren Corp. Then, the creative director for the Banana Republic brand, Marissa Webb, who was hired to re-energize Banana Republic, stepped down after dismal results.

The San Francisco-based chain says fourth-quarter profits were $214 million, or 53 cents per share, for the three-month period ended Jan. 30. That compares with $319 million or 75 cents per share, in the year-ago period.

Adjusted profit results were 57 cents per share, a penny above analysts' estimates, according to FactSet.

Revenue slipped nearly 7 percent in the quarter to $4.39 billion, in line with estimates.

Revenue at stores opened at least a year fell 7 percent. By division, Gap's metric fell 6 percent, while Banana Republic suffered a 10 percent drop, and Old Navy was flat.

The company also announced its board authorized the repurchase of up to $1 billion in stock.

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