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Gap’s sales fall 43% as retailer takes hit from coronavirus pandemic; shares dive


A view of Gap Clothing Store in Times Square in New York City USA in the course of the coronavirus pandemic on May 9, 2020 in New York City.

John Nacion | NurPhoto | Getty Images

Gap Inc.‘s first-quarter sales fell 43%, the clothes maker reporter Thursday, as its shops had been shut for a lot of the interval as a result of coronavirus pandemic. 

Chief Executive Sonia Syngal mentioned in an announcement that sales continued to say no into May, after the primary quarter ended, however the retailer had on-line development of greater than 100% in the course of the month. 

As of Thursday, greater than 1,500 shops are again open for enterprise in North America, Syngal mentioned, which is about 55% of the corporate’s base and is forward of schedule. Gap is planning to have most of its shops reopened this month, she mentioned. 

Gap shares had been falling round 6% in after-hours buying and selling on the information. 

Here’s how the corporate did throughout its fiscal first quarter ended May 2: 

  • Loss per share: $2.51 
  • Revenue: $2.11 billion 

Gap reported a internet lack of $932 million, or $2.51 per share, in contrast with a revenue of $227 million, or 60 cents a share, a 12 months in the past. 

The loss included a $484 million writedown on retailer and working lease property, together with a list impairment cost of $235 million. 

Net sales fell to $2.11 billion from $3.71 billion a 12 months in the past. It mentioned e-commerce sales had been up 13% 12 months over 12 months in the course of the quarter. 

The firm didn’t escape its same-store sales as a result of non permanent retailer closures. 

Analysts had been calling for Gap to lose 67 cents per share on income of $2.Three billion, in line with Refinitiv information. However, it’s tough to check reported earnings to analyst estimates for the quarter due to the impression of the pandemic. 

Sales for Gap’s namesake model had been down 50%, whereas Old Navy sales had been down 42%, Banana Republic sales fell 47% and Athleta sales dropped 8%.

Some of those manufacturers fared a lot better on-line, nevertheless. Athetla, which sells exercise gear like leggings and sports activities bras for ladies, noticed development of 49% on-line, the corporate mentioned. Old Navy, a value-oriented attire model for households, noticed on-line sales rise 20%. Banana Republic’s on-line enterprise was down 2% in the course of the quarter, whereas Gap’s digital income dropped 5%. 

“Prior to the onset of the pandemic, Gap brand performance continued to be pressured by inconsistent execution of product and marketing messages,” the corporate mentioned. 

It additionally mentioned it’s working to make Banana Republic, usually an outlet for folks to purchase garments to put on to the workplace, extra related as extra shoppers are working from dwelling. 

The Covid-19 disaster compelled Gap to shut all of its shops, which damage its potential to generate income. Without money coming within the door, Gap stopped paying hire. The retailer is the most important non-anchor tenant by way of the hire it pays to Simon Property Group, the largest U.S. mall proprietor. And Simon is now suing Gap for not paying hire, in line with a lawsuit filed this week. 

Gap isn’t offering a 2020 monetary outlook at the moment. 

As of Thursday’s market shut, Gap shares are down greater than 31% this 12 months. The firm has a market cap of $4.5 billion. 

Find the complete earnings press launch from Gap right here. 



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