A man walks past a store on January 12, 2021 in New York.
Angela Weiss | AFP | Getty Images
Gap Inc. On Thursday, he predicted a return to sales growth in 2021, hoping that customers will soon return to his stores and spend more money on clothing while they want to resume some social activities.
Its shares increased by more than 4% in trading after the program.
The clothing manufacturer reported sales in the fourth quarter, which did not reach estimates, as the ongoing coronavirus pandemic forced the temporary closure of stores in Europe, parts of Asia and Canada. But he made a profit, because of his efforts to sell more goods at full price and progress, made the stores not perform well.
It has shown a continuous strength in its Old Navy and Athleta brands, which focus on basic elements and training equipment. But its Gap brand and Banana Republic label reported another quarter of declining sales.
For the quarter ended Jan. 30, Gap reported net income of $ 234 million, or 61 cents a share, compared to a loss of $ 184 million, or 49 cents a share, a year earlier.
Recent earnings have included a tax gain of approximately 45 cents per share and a depreciation fee of approximately 12 cents per share related to Gap’s Intermix business. Analysts were demanding earnings of 18 cents a share, according to a poll conducted by Refinitiv. It was not immediately clear whether analysts considered the impact of these elements.
Net sales fell about 5 percent to $ 4.42 billion from $ 4.67 billion a year earlier. That was beyond analysts’ estimates of $ 4.66 billion.
Sales at the same store for the Gap athletic apparel brand, Athleta, increased 26% year-over-year and increased 7% at Old Navy. However, Gap’s eponymous brand saw a 6% drop in sales at the same store, and Banana Republic said the key value fell 22%. In-store sales are a key value for retailers who track performance online and in stores that have been open for at least a year.
Gap said its global online sales rose 49 percent, accounting for 46 percent of net sales in the quarter.
For fiscal year 2021, the company expects net sales to increase by a percentage of teenagers between half and high compared to 2020. This assumes that the impacts related to Covid will continue in the first half of 2021, and the retailer returns to a higher level pandemic of sales in the second half of the year, the company said.
Analysts demanded a 14.1% year-over-year increase in revenue, according to Refinitiv.
It is estimated that earnings will be between $ 1.20 and $ 1.35 per share. Analysts had anticipated earnings of $ 1.28 per share.
However, a constraint continues to be the remaining US ports that cause the stock in transit to freeze for longer periods of time. Gap said it expects port congestion to continue until the first half of the year. Therefore, stock levels are expected to remain high in the second quarter, rising in large numbers compared to a year earlier.
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 globally.
Gap shares have risen by about 75% in the last 12 months. The company has a market cap of $ 9.46 billion.
Find the full Gap press release here.