Gap Inc. (GPS - Analyst Report) continues to struggle to connect with consumers in several of its brands. Earnings are expected to contract this year for this Zacks Rank #5 (Strong Sell).

Gap is a global specialty retailer with more than 3300 company-operated stores and 400 franchised stores in 90 countries along with e-commerce sites. It operates the well-known brands Gap, Banana Republic, Old Navy, Athleta and Intermix brands.

Another Earnings Meet But Sales Disappoint

On Nov 19, Gap reported its third quarter fiscal 2015 results and met the Zacks Consensus.

Net sales fell 3% to $3.86 billion from $3.97 billion a year ago.

But the real story was really in the comparable store sales results as they fell 2% versus a 2% decline the year before.

Old Navy was the only positive out of the major brands. It saw comparable store sales rise 4%. Gap Global saw a decline of 4% and Banana Republic continued to struggle as it fell 12%.

The company still doesn't bust out the numbers for Athleta, its very successful athletic brand. That leaves me to guess at how that brand is doing.

It goes up against some stiff competition in lululemon, North Face, Columbia Sportswear and others but Gap has been aggressive with its roll out campaign.

Gap is expecting to have 120 Athleta stores by the end of the fiscal year in the United States. It recently rolled out the AthletaCard which will join the Gap's other credit cards in that you can use it at any of its stores and accumulate points.

It also is expanding its Old Navy brand with 7 company-owned brands now open in Mexico with the expectation of 9 stores by the end of the fiscal year.

Earnings Estimates Slashed

Gap called the third quarter "challenging" but the analysts don't seem to believe that they will turn it around this holiday season.

Sixteen estimates were cut for fiscal 2015 in the last week. The Zacks Consensus Estimate has fallen to $2.40 from $2.61 just 30 days ago.

That is an earnings decline of 12.9% from fiscal 2014 when the company earned $2.76 per share.

Next year isn't supposed to see much of a rebound. Earnings are expected to rise, but just 4.4%.

Shares at Multi-Year Lows

Gap shares have been sliding for awhile but the earnings report pushed them to new 3-year lows.

They're now cheap, as well, with a forward P/E of just 11.5.

But it still appears that some of its brands may continue to struggle.

Not all retailers are struggling right now though.

American Eagle Outfitters (AEO - Analyst Report) saw its comparable store sales rise 9% in the third quarter despite the challenging retail environment. It also raised third quarter earnings guidance. It's a Zacks Rank #1 (Strong Buy).