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Earnings Results

March 5, 2021, 7:41 a.m. EST

Gap sales miss estimates due to pandemic closures and restrictions

By Levi Sumagaysay

Gap Inc. late Thursday said its sales fell 5% in the quarter that included the holidays, citing international store closures and U.S. stay-at-home restrictions.

Gap (NYS:GPS) said fourth-quarter revenue fell to $4.42 billion from $4.67 billion in the year-ago quarter. The San Francisco-based company swung to a profit, though, posting fourth-quarter net income of $234 million, or 61 cents a share, compared with a loss of $184 million, or 49 cents a share, in the year-ago period. Gap said its earnings included 45 cents a share for non-recurring tax benefits and 12 cents a share in impairment charges related to its Intermix business.

Analysts polled by FactSet expected the retailer to report adjusted earnings of 19 cents a share on sales of $4.66 billion.

Gap Chief Executive Sonia Syngal said in a statement that the company managed to gain market share despite “one of the most difficult years” in its history, pointing to its $6 billion in online sales for the year, a 54% increase. Online sales represented 45% of total sales, up from 25% in 2019, the company said.

Results were mixed at Gap’s various brands: Net sales rose 5% at Old Navy and 29% at Athleta, while net sales fell 19% at Gap and 27% at Banana Republic. Same-store sales revenue increased 7% at Old Navy and 26% at Athleta, and decreased 6% at Gap and 22% at Banana Republic.

For the full year, Gap reported $13.8 billion in sales, down from $16.38 billion in 2019. The company lost $665 million in 2020, or $1.78 a share, compared with net income of $351 million, or 93 cents a share, in the previous year. Analysts had expected a loss of $2.21 a share on revenue of $14 billion.

Gap stock fell early in extended trading but was up nearly 2.5% at about 5 p.m. Eastern. They fell 1.75% in the regular session to close at $25.30.  Shares of Gap have gained about 75% in the past 12 months, compared with gains around 20% for the S&P 500 index (S&P:SPX) .

Link to MarketWatch's Slice.