- Huw Hughes
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For the first quarter ended May 4, 2019, net sales at Gap Inc. were 3.7
billion dollars, a decrease of 2 percent compared with last year, while
gross profit was 1.34 billion dollars, down 6 percent. Diluted earnings per
share were 0.60 dollars on a reported basis.
“This quarter was extremely challenging, and we are not at all satisfied
with our results. We are committed to improving our execution and
performance this year,” Art Peck, president and chief executive officer at
Gap Inc said in a statement. “We remain confident in our plan to separate
into two independently traded public companies in 2020, and we are focused
on setting up both companies for long term value creation and profitable
growth.”
Gap’s comparable sales for the first quarter were down 4 percent
compared with a 1 percent increase last year. Comparable sales at Gap
Global were negative 10 percent versus negative 4 percent last year; at
Banana Republic Global, negative 3 percent versus positive 3 percent last
year; and at Old Navy Global, negative 1 percent versus positive 3 percent
last year.
Gross margin was 36.3 percent, a decrease of 140 basis points compared
with last year, while operating margin was 8.5 percent, an increase of 240
basis points compared with last year. Adjusted operating margin was 3.5
percent, a decrease of 260 basis points compared with last year.
The company said it now expects to close about 30 company-operated
stores, net of openings and repositions in fiscal year 2019. “The updated
guidance reflects about 10 additional store openings for both Old Navy and
Athleta,” the company said in its quarterly report. “This guidance also
includes about 130 closures related to the Gap brand fleet restructuring,
the majority of which are expected to close in the fourth quarter of fiscal
2019.” The company expects store openings to be focused on Old Navy,
Athleta and Gap China locations.
Photo credit: Gap, Facebook
