Gap (GPS) Reports Fourth Quarter 2020 Earnings, 2021 Sales Outlook

A man walks past a store on January 12, 2021 in New York City.

Angela Weiss | AFP | fake images

Gap Inc. predicted a rebound in sales growth in 2021 on Thursday, hoping that customers would soon return to their stores and spend more money on clothing as they look to resume some social activities.

Its shares rose more than 3% in after-hours trading.

The apparel maker reported fourth-quarter sales that fell short of estimates as the ongoing coronavirus pandemic forced temporary closures of stores in Europe, parts of Asia and Canada. But he made a profit, thanks to his efforts to sell more merchandise at full price, and the progress was successful in closing underperforming stores.

It showed continued strength in its Old Navy and Athleta brands, which focus on the basics and training gear. But its namesake brand Gap and the Banana Republic label reported another quarter of sales declines.

For the quarter ended January 30, Gap reported net income of $ 234 million, or 61 cents a share, compared with a loss of $ 184 million, or 49 cents a share, a year earlier.

Earnings in the most recent period included a taxable profit of approximately 45 cents per share and an impairment charge of approximately 12 cents per share related to Gap’s Intermix business. Analysts had been calling for earnings of 18 cents a share, according to a Refinitiv survey. It was not immediately clear whether analysts had taken into account the impact of these elements.

Net sales fell about 5% to $ 4.42 billion from $ 4.67 billion a year earlier. That was below analyst estimates of $ 4.66 billion.

Same-store sales for Gap’s Athleta sportswear brand grew 26% year-over-year, and increased 7% at Old Navy. However, Gap’s namesake brand saw a 6% drop in same-store sales, and Banana Republic said the key metric fell 22%.

Gap said its overall online sales increased 49%, representing 46% of net sales for the quarter.

For fiscal 2021, the company is asking for net sales to increase by a medium to high percentage of teens compared to 2020. That’s assuming Covid-related impacts continue into the first half of 2021, and the retailer returns to a more normalized previous level. -Pandemic level of sales in the second half of the year, the company said.

Analysts had been calling for year-over-year revenue growth of 14.1%, according to Refinitiv.

You are forecasting earnings in the range of $ 1.20 to $ 1.35 per share. Analysts had expected earnings of $ 1.28 per share.

Gap said it plans to open 30 to 40 Old Navy stores, along with 20 to 30 Athleta stores this year. And it will close about 100 Gap and Banana Republic stores around the world.

Gap shares have risen 75% in the last 12 months. The company has a market capitalization of $ 9.46 billion.

Find Gap’s full press release here.

This story is unfolding. Please check for updates.


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