Gap Inc.

Gap profit misses forecasts on sales slump at namesake brand

Gap Inc. reported a first-quarter profit that missed Wall Street expectations, hurt by a deeper slump in demand for its namesake label. Its shares fell 7 percent in extended trading.

The San Francisco-based chain said that overall sales at established stores rose 1 percent, dragged down by a 4 percent drop at Gap. Old Navy and Banana Republic both saw sales rise 3 percent.

The results underscore how the Gap brand itself is failing to connect with shoppers, even as the company works to overhaul the business. The chain has been shifting its focus to its growing Old Navy and Athleta stores and away from the Gap and Banana Republic brands. Lower-priced Old Navy, in particular,...