Gap employees Photo: Gap Inc.
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Gap Inc. Beats Wall Street Forecast for Second Quarter
Gap Inc. reported that its online sales skyrocketed 95 percent and its same-store sales increased 13 percent for the second quarter of its 2020 fiscal year compared with the same quarter of the previous year, said Sonia Syngal, Gap Inc.’s chief executive officer.
“Our strong performance in the second quarter reflects the customer response to our brands, products and experiences, particularly as we’ve rapidly adapted to the changing environment. We nearly doubled our e-commerce business, with approximately 50 percent online penetration, demonstrating our ability to pivot to a digitally led culture,” she said.
The San Francisco–headquartered specialty-retail giant beat Wall Street forecasts, according to Clark Schultz, a writer for the Seeking Alpha stock website. Sales of Gap Inc. stock increased 7 percent after the second-quarter report.
Gap Inc.’s second quarter ran from early May, when a partial closure was in effect due to COVID-19 shutdowns. About 90 percent of Gap Inc.’s stores had reopened by the second quarter, which was Aug. 1. Gap Inc.’s same-store sales were measured by stores that were open for business for most of the quarter.
During the second quarter, Gap Inc.’s net sales were $3.2 billion. That was down 18 percent compared to the net sales of $4 billion in the second quarter of the 2019 fiscal year. There was a 48 percent decline in bricks-and-mortar store sales. Gap Inc. also reported net sales results for its divisions. Net sales for its namesake brands Gap Global declined 28 percent. Net sales for Banana Republic Global declined 52 percent. Net sales for Old Navy Global were down 5 percent. Net sales for the Athleta division increased 6 percent.
Gap Inc. also announced that its financial position was strong and that it was prepared to weather the still unfolding impact of the COVID-19 pandemic. On the day it released the second-quarter results, it also announced a $1.87 billion asset-based revolving-credit facility. However, it would not provide a financial outlook, said Katrina O’Connell, Gap’s chief financial officer.
“Recognizing the uncertainty ahead, we remain committed to amplifying our distinct advantages and leveraging our scale to capture share as demand recovers,” she said.
