Gap (GPS) reports a drop in revenue in the first quarter of 2021

August 2, 2020, Gap Store in New York.

Scott Murin | CNBC

gap First-quarter sales were above pre-pandemic levels as shoppers turned to Old Navy and Athleta to refurbish their outfits for the summer.

The retailer raised its full-year sales outlook as the banner from which the name Gap was derived in North America showed early signs of improvement and e-commerce growth remained strong. According to the company, 80% of sales come from outside traditional shopping centers: online, strip centers, or street-level locations.

However, the gap continues to face supply chain challenges and faces obstacles to raw material procurement as Covid cases continue to grow in countries, including India. In Canada, Europe, China and Japan. He said the recurrence of the Covid-19 case would pose a risk to demand in the short term.

Gap’s share price has recently fallen by about 2% in long-term trading.

“While active fleece and fleece continue to skyrocket, summer fashion is back and dresses are rebounding, at the expense of familiar comfort and digital convenience as customers are coming out of crisis. It shows that he wants to express his style without any, “CEO Sonia Singal said in a statement.

Here’s how the gap behaved during the period through May 1 compared to what the analysts surveyed by Refinitiv expected.

  • Earnings per share: Adjusted 48 cents, expected loss of 5 cents
  • Revenue: $ 3.45 billion, expected to be $ 3.99 billion

The gap resulted in a profit of $ 166 million (43 cents per share) from a loss of $ 923 million ($ 2.51 per share) in the year-ago quarter. Excluding the one-time costs associated with the sale of Janie & Jack and Intermix, Gap earned 48 cents per share during the quarter. This was well above the expected loss of 5 cents.

Total revenue increased from $ 2.11 billion in the previous year, when retail stores were closed for a period of time due to Covid’s pandemic, to $ 3.99 billion. This exceeded Refinitiv’s estimate of $ 3.45 billion.

Gap estimated sales were down 2% from 2019 levels in the latest period due to ongoing Covid-related closures in markets outside the United States. Overall, Q1 sales increased 8% on a two-year basis.

In Old Navy, comparable sales were up 35% year-over-year and up 25% year-on-year in 2019. In the Athleta business, compared sales increased 27% from last year, up 46% on a two-year basis. According to Gap, the two brands accounted for 66% of company-wide sales in the latest quarter.

Global sales, named after Gap, increased 29% from last year, but fell 1% on a two-year basis. In North America, the brand showed signs of progress, with comparable sales in the region up 9% from 2019.

Banana Republic sales were down 4% year-on-year on a comparable basis and down 22% year-on-year.

Online sales increased 82% from two years ago, accounting for 40% of total revenue. Store sales fell 16% in two years, largely due to continued store closures and Covid restrictions outside the United States, Gap said.

The future outside the mall

As Gap seeks future growth, Gap is increasingly finding it outside of traditional shopping centers, as the latest results show.

The company had Announced that it plans to close about 350 last fall By the end of the 2023 fiscal year, we have reduced the number of North American Gap and Banana Republic stores, many of which are in malls. As part of its roadmap, Gap announced Thursday that it would close 75 poorly performing stores later this year.

Retailers are now demanding adjusted earnings to range from $ 1.60 to $ 1.75 per share, as net sales will increase in the mid-20% to mid-20% range from 2020. . Sales growth for teens.

However, Gap said the outlook includes the potential impact of an ongoing strategic review of European operations, while overseas store closures and port congestion associated with the new coronavirus remain headwinds. Pointed out that there is no.

Analysts expected earnings per share to be $ 1.38 for fiscal year 2021 and a 17.8% year-on-year increase in sales.

Gap soon WalmartLarge store, Launching a new home brandAnd a collaboration with Gap’s long-awaited clothing rapper Kanye West, Line Called the easy gap, Is still scheduled to debut later this year.

“Through the partnership, we can extend the reach of our brand to our customers,” Singal said in a financial conference call.

Gap shares closed on Thursday, rising about 4%. Share prices have risen 74% to a market capitalization of $ 13.2 billion.

Click here for the full press release on Gap’s earnings.

Gap (GPS) reports a drop in revenue in the first quarter of 2021

Source link Gap (GPS) reports a drop in revenue in the first quarter of 2021

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