Gap Boosts Annual Sales, Profit Forecast as Recovery Grinds On
(Bloomberg) -- Gap Inc. topped Wall Street’s earnings expectations and boosted its profit forecast even as the retailer’s sales fell short of estimates, showing the challenge apparel companies face in recovering from a pandemic slump.
- The company, which also owns Old Navy and Banana Republic, said comparable sales rose 28% from a year earlier, below the 58% average of analysts’ estimates.
- The company sees full-year earnings of $1.55 to $1.70 a share, up from a prior forecast of no more than $1.35. It sees net sales growth for fiscal 2021 to rise in the low-to-mid 20% range from a year earlier -- an increase from the previous projection of growth in the mid-to-high teens.
- Investors have been watching for signs of recovery across the apparel industry, which struggled during lockdowns earlier in the pandemic. Chief Executive Officer Sonia Syngal said in a statement that Gap had “market share gains that outpaced the industry” and saw “particular strength” in its Old Navy and Athleta brands.
- The company has accelerated its move to e-commerce since the pandemic hit. Digital sales were 82% higher than in 2019. Syngal said the company saw a resurgence in summer fashion such as dresses.
- The shares swung between gains and losses in postmarket trading, falling 0.9% as of 4:34 p.m. in New York. The stock had climbed 74% this year through Thursday’s close.
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