Gap Inc. reports sales decline in Q4
Gap Inc., parent company of Old Navy, Gap, Banana Republic and Athleta brands, has reported its financial results for the Q4, ending 30 January 2021.
The group reported fourth quarter net sales reached $4.4 billion, a decrease of 5% compared with 2019, with COVID-mandated store closures in some markets and softer store traffic in the US impacting sales by an estimated 4%.
In addition, the group suggests strategically planned permanent store closures had an estimated sales impact of about 5%
Online sales grew 49% compared with last year, with online representing 46% of net sales in the fourth quarter, increasing 17% on last year. Store sales declined by 28% in the quarter.
Q4 net sales at the Gap brand were down 19% and comparable sales were down 6%.
The company noted it is undergoing a strategic review of its Intermix business. As a result, the company recorded a $56 million impairment charge related to the Intermix trade name as well as store and operating lease assets.
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Gap Inc. ended the fiscal year 2020 with $2.4 billion in cash, cash equivalents, and short-term investments, compared to $1.7 billion at the end of fiscal year 2019, providing sufficient liquidity to address remaining challenges from the COVID pandemic.
Despite the uncertainty remaining as a result of COVID, the company has confirmed it will provide a fiscal year 2021 financial outlook. The outlook does not include any financial impacts stemming from ongoing strategic reviews, including its Europe and Intermix businesses.
It expects 2021 net sales to reflect 10%-20% growth versus 2020, which assumes COVID impacts persisting in the first half of 2021 and a return to a more normalised, pre-pandemic level of net sales in the second half of 2021.
Sonia Syngal, Chief Executive Officer, Gap Inc, said: “We faced one of the most difficult years in our company’s history and, throughout, our teams showed resilience and determination as we navigated unprecedented disruption in our industry to set a course for long-term growth.
"Our powerful brands moved to offence with purpose-led marketing and strength in relevant categories, like Active and Fleece, allowing us to gain meaningful market share quarter-over-quarter in a fragmented environment. This was enabled by our $6 billion online business and advantaged digital capabilities allowing us to expand our reach to more than 183 million customers this year."
Last month, TheIndustry.fashion reported that Gap is planning to close all of its stores in the UK in July 2021, resulting in the loss of hundreds of jobs.
