Gap Inc. 3rd-Quarter Sales Drop 4 Percent
A couple of weeks after the resignation of Art Peck, the former Gap Inc. chief executive officer, the San Francisco–headquartered specialty retailer announced that same-store sales for its 2019 third quarter declined 4 percent, said Robert J. Fisher, Gap Inc.’s interim president and chief executive officer.
“We are not pleased with the third-quarter results and are focused on aggressively addressing the operational issues that are hindering the performance of our brands,” he said.
Gap Inc. also broke down the same-store sales for its main divisions. Its strongest performer, the Old Navy Global division, experienced a reversal when it was announced that its same-store sales declined 4 percent compared to the performance of the third quarter of the 2018 fiscal year, when there was a 4 percent increase.
The retailer’s namesake division, Gap Global, announced declines of 7 percent during the 2019 third quarter compared to a 7 percent drop in the same quarter the previous year. Banana Republic Global announced a decline of 3 percent compared to a 2 percent increase in the same quarter the previous year.
Gap Inc.’s net sales for the quarter were $4 billion, which was a decrease of 2 percent compared to the previous year. Gross profit was $1.56 billion, which was a decrease of 4 percent compared to the previous year.
The retailer also gave guidance for real estate. It announced that it would close 15 company-owned stores. It also plans to close a number of its overseas stores, about 130 in China.
Gap Inc. runs 3,938 stores in 44 countries around the world of which 3,396 are company owned. The company also announced that it would spend $100 million in expansion costs related to a headquarters building and a buildout of its Ohio distribution center.