Gap October, third quarter sales hindered by distribution center fire
Gap reported its October and third quarter sales results on Monday. Sales for the Gap and Banana Republic brands continue to slip and could not be saved by Old Navy’s positive performance.
October net sales were $1.20 billion, or flat when compared to the previous year’s comparable period, and third quarter net sales were $3.80 billion compared to $3.86 billion in the previous third quarter.
Total company October comparable sales fell 1% compared to falling 3% in 2015. The Fishkill distribution center fire negatively impacted the comparable sales by 3 percentage points. Gap Global comparable sales were down 7%, Banana Republic Global was negative 4%, and Old Navy Global was positive 3%, but all were negatively impacted by the fire.
Gap noted that the exceptionally high October margin rates offset the estimated lost sales and increased costs from the Fishkill distribution center fire. An intentional fire destroyed the Fishkill center in September and negatively impacted the company’s September same store sales.
Third quarter comparable sales fell 3% compared to decreasing 2% in 2015. Gap Global and Banana Republic Global third quarter comparable sales were both negative 8%, and Old Navy Global was positive 3%.
“As we close out the quarter, we are pleased to see a continued positive customer response to our Old Navy product collections,” said Sabrina Simmons, chief financial officer, Gap Inc.
For the third quarter of 2016, Gap expects its diluted EPS to range between $0.50 and $0.51, and for the adjusted diluted EPS to range between $0.59 and $0.60.
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