The FINANCIAL — Gap Inc. on May 9 announced April net sales were $1.12 billion for the four-week period ended April 30, 2016, compared with net sales of $1.21 billion for the four-week period ended May 2, 2015. For the first quarter of fiscal year 2016, Gap Inc.’s net sales were $3.44 billion compared with $3.66 billion for the first quarter last year.
Gap Inc. also announced that it will take steps to better position the company for improved business performance and to build for the future. The company is identifying opportunities to streamline its operating model to be more efficient and flexible, while more fully exploiting its scale advantage. Additionally, the company is evaluating its Banana Republic and Old Navy fleets, primarily outside of North America, in order to sharpen its focus on geographies with the greatest potential. More details will be shared during the company’s first quarter fiscal 2016 earnings announcement on May 19, 2016, according to Gap.
“Our industry is evolving and we must transform at a faster pace, while focusing our energy on what matters most to our customers,” said Art Peck, chief executive officer, Gap Inc. “We are committed to better positioning the business to recapture market share in North America and to capitalizing on strategic international regions where there is a strong runway for growth.”
April Comparable Sales Results
Gap Inc.’s comparable sales for April 2016 were down 7 percent versus a 12 percent decrease last year. Comparable sales by global brand for April 2016 were as follows:
Gap Global: negative 4 percent versus negative 15 percent last year
Banana Republic Global: negative 7 percent versus negative 15 percent last year
Old Navy Global: negative 10 percent versus negative 6 percent last year
First Quarter Comparable Sales Results
Gap Inc.’s comparable sales for the first quarter of fiscal year 2016 were down 5 percent versus a 4 percent decrease last year. Comparable sales by global brand for the first quarter were as follows:
Gap Global: negative 3 percent versus negative 10 percent last year
Banana Republic Global: negative 11 percent versus negative 8 percent last year
Old Navy Global: negative 6 percent versus positive 3 percent last year
First Quarter Guidance
The company expects diluted earnings per share for the first quarter of fiscal year 2016 to be in the range of $0.31 to $0.32.
As previously disclosed, gross margins were pressured as the company entered April with more inventory than planned as a result of weaker than expected traffic, which began in late March 2016 and continued into April.
The company also noted that the Sunday and Monday of the Memorial Day holiday falls in the fiscal month of June this year versus May last year. The company expects the later holiday timing to negatively impact May sales results and benefit June sales results.
Discussion about this post