Gap (GPS) reports Q2 2020 loss per share, 18% decline in sales

Gap Inc. said its total sales grew 18% on Thursday, a 95% increase in e-commerce revenue from a year earlier, but store sales dropped by 48% during the Coronavirus epidemic. was.

It went into net losses from a year earlier, as lower sales weighed on the profits combined with shipping expenses in addition to all those online orders.

Here is what Gap expected from analysts based on refinitive data during its financial second quarter:

  • Loss per share: Expected loss of 17 cents vs 41 cents
  • Revenue: $ 3.28 billion vs. $ 2.91 billion expected

For the period ended August 1, Gap reported a loss of $ 62 million, or 17 cents per share, with net income of $ 168 million, or 44 cents per share a year earlier. This is better than analysts’ forecast of a loss of 41 cents per share based on a refinitive poll.

Sales fell nearly 18% to $ 3.28 billion, beating analyst expectations for $ 1.91 million from $ 4 billion a year earlier.

The retailer, which also owns Old Navy and Banana Republic, nearly doubled its e-commerce business during the quarter, said chief executive Sonia Sinagal, with customers stocking up on basic tees, workout shorts and pajama sets. Gap is also selling face masks to protect individual consumers and other businesses in bulk – against Covid-19 – which is expected to contribute to sales.

Uniform online sales, which track sales online and open stores for at least 12 months, have increased by up to 13%, the company said, driven by the strength of its online business. The 13% figure is only for days that the Gap stores were physically open for business during the quarter. Gap said it added 3.5 million new digital subscribers during this period.

Sales of its name Gap brand registered a decline of 2%, with a 5% increase in online and a 55% drop in shops.

At Old Navy, which has been one of Gap’s strongest performing brands as of late, sales fell 5% overall, with a 136% increase in online and in stores at 36%. Gap said her old Navy shops located far from shopping malls are doing better than others, as they have reopened, “and there is an advantage.”

Banana Republic sales declined 52%, including 26% online jumps and 71% stores. Gap said the brand, which focuses on offering men and women dresses to work. It said that it is still working to move the list of banana republics to offer more casual fashion.

Within Athleta – Gap’s athletic apparel brand for women, which competes with the likes of Lululemon and Nike – sales rose 6%, making Athleta the only revenue growth within Gap Inc. Athleta’s online sales were up 74%, while shop sales were down 45%.

Gap ended the quarter with $ 2.2 billion in cash and cash equivalents on its balance sheet, adding that it “is in solid financial position to navigate through the ongoing epidemic and continue investing in its business.”

It said it recently acquired an $ 1.87 billion asset-based revolving loan facility, replacing its former $ 500 million unsecured revolving loan facility, for which it has yet to borrow and until this financial year Do not expect to reach.

The company is not currently offering an earnings outlook for 2020, however, due to uncertainty from the global epidemic.

As of Thursday’s market close, Gap shares are down less than 1% year-to-date. It has a market cap of $ 6.5 billion.

Find the full earnings press release from the gap here.

This story is developing. Please check back for updates.


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