Gap Inc. late Thursday said it halted its dividend for the rest of the year and postponed the payment of the previously announced first-quarter dividend amid “precautionary actions” to shore up its balance sheet in response to the COVID-19 pandemic. “We entered 2020 in a strong financial position. However, in this time of unprecedented disruption to the retail sector, we are proactively taking the prudent actions to further strengthen our financial liquidity and flexibility,” Chief Executive Sonia Syngal said in a statement. The company said it is drawing down its entire $500 million revolving-credit facility, cutting capital expenses by about $300 million for the year, and “reviewing all operating expenses” with the aim to reduce them. The company’s previously scheduled first-quarter dividend of 24.25 cents a share will be payable “on or after April 28,” subject to “the right of the company to further defer the record and payment dates, depending upon, among other factors, the progression of the COVID-19 outbreak,” Gap said. The company also withdrew its 2020 guidance issued on March 12, and said it is not providing an updated outlook at this time, with more information to come at its first-quarter earnings call in May. Shares of Gap fell 0.8% in the extended session Thursday after ending the regular trading day down nearly 6%.
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