A man walks past a store on January 12, 2021 in New York City.
Angela Weiss | AFP | Getty Images
Gap Inc. on Thursday predicted a rebound in sales growth in 2021, in the hope that customers will soon return to their stores and spend more money on clothes while looking to resume some social activities.
Its shares rose more than 3% on the floor.
The clothing maker said fourth-quarter sales were below expectations, as the ongoing coronavirus pandemic forced the temporary closure of stores in Europe, parts of Asia and Canada. But it made a profit, thanks to its efforts to sell more goods at full price and to progress, closing underperforming stores.
He showed continued strength in his Old Navy and Athleta brands, which focus on basic and training equipment. But its eponymous brand Gap and the Banana Republic label reported another quarter of a drop in sales.
For the quarter ended January 30, Gap reported net income of $ 234 million, or 61 cents per share, compared to a loss of $ 184 million, or 49 cents per share, a year earlier.
Gains in the most recent period included a tax gain of around 45 cents per share and a depreciation charge of around 12 cents per share related to Gap’s Intermix business. Analysts had been asking for earnings of 18 cents per share, according to a Refinitiv survey. It was not immediately clear whether analysts considered the impact of these items.
Net sales fell about 5%, to $ 4.42 billion, from $ 4.67 billion a year earlier. This fell short of analysts’ estimates of $ 4.66 billion.
Same-store sales for Gap sportswear brand Athleta grew 26% year-over-year, and increased 7% at Old Navy. Gap’s namesake brand, however, recorded a 6% drop in same-store sales, and Banana Republic said the main metric dropped 22%.
Gap said its overall online sales increased 49%, representing 46% of net sales during the quarter.
For fiscal year 2021, the company is asking net sales to increase a percentage of teenagers from mid to high compared to 2020. This assuming that Covid-related impacts continue in the first half of 2021, and the retailer returns to a more normalized period, pre-pandemic sales level in the second half of the year, the company said.
Analysts had been asking for a 14.1% year-on-year revenue growth, according to Refinitiv.
He is forecasting earnings in the range of $ 1.20 to $ 1.35 per share. Analysts had predicted earnings of $ 1.28 per share.
Gap said it plans to open 30 to 40 Old Navy stores, in addition to 20 to 30 Athleta stores this year. And it will close about 100 Gap and Banana Republic stores worldwide.
Gap’s shares have risen about 75% in the past 12 months. The company has a market value of US $ 9.46 billion.
Find the full Gap press release here.
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