Gap fourth-quarter results beat, warns 2020 sales face coronavirus hit
Gap Inc on Thursday said comparable sales for the fourth-quarter fell less-than-expected, as the coronavirus continues to spread across the globe causing mass supply chain delays and sales halts for retailers.
The San Francisco-based Gap said total sales were up 1% to $4.7 billion in the fourth quarter ended February 1, while comparable sales fell just 1%, compared with the expectations of a 3.58% decline, according to analysts.
Comps were held up by Gap's Old Navy label, which remained unchanged on last year. However, Gap brand comparable sales fell 5% during the three-month period, with Banana Republic sales flat and the company's activewear brand Athleta lifting 2% for the quarter.
During the quarter, Gap clocked a net loss of $184 million, compared with a net income of $276 million in the year-ago quarter, proving to be a lacklustre end to 2019.
For the full-year, net income fell to $351 million, from $1 billion in the previous year. Sales were down 1% to $16.4 billion, while comparable sales were down 1%.
Looking ahead, excluding the impact of the coronavirus, Gap forecast earnings of between $1.80 per share and $1.92 per share for fiscal 2020.
“Due to the evolving coronavirus situation, we are facing a period of uncertainty regarding the potential impact on both our supply chain and customer demand,” said newly named Gap Inc. chief executive officer, Sonia Syngal.
In the earnings release on Thursday, Gap also announced a series of group appointments. Katrina O’Connell, chief financial officer of Old Navy, was named the company’s new chief financial officer, succeeding Teri List-Stoll, who has served in the role since January 2017.
Meanwhile, Mark Breitbard has been chosen to lead the company’s specialty brands segment, as well as Gap's Asia business and its franchise category.
With Syngal recently promoted to CEO of Gap Inc., Nancy Green will now lead the Old Navy brand, replacing Syngal in the interim, until a suitable president and CEO is found.
Gap Inc. shares rose some 4% after the closing bell on Thursday.
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