Gap Inc. slashed its full-year outlook, with fiscal third-quarter results falling short as Covid-related factory closures led to significant product delays in the quarter.
Its stock was recently down 17.3% in extended trading on the news.
Here’s how Gap did in the three-month period ended Oct. 30 compared with what analysts were anticipating, using Refinitiv data:
- Earnings per share: 27 cents adjusted vs. 50 cents expected
- Revenue: $3.94 billion vs. $4.44 billion expected
Gap said it swung to a net loss of $152 million, or 40 cents per share, from net income of $95 million, or 25 cents a share, a year earlier.
Excluding items, it earned 27 cents per share, short of the 50 cents that analysts had been looking for, according to Refinitiv.
Revenue fell slightly to $3.94 billion from $3.99 billion a year earlier. That missed expectations for $4.44 billion.
Comparable sales at Old Navy fell 9% year over year and were up 6% compared with 2019. The company said this banner was disproportionately impacted by supply chain delays, particularly its women’s assortment.
At its namesake Gap brand, comparable sales rose 7% from a year earlier and were up 3% versus 2019.
At Banana Republic, which focuses more on selling work wear for women, comparable sales rose 28% from year-ago levels and fell 10% on a two-year basis.
Comparable sales at Athleta, Gap’s rival to Lululemon and Nike for women, increased 2% from a year earlier and rallied 41% versus 2019.
Gap’s expectations for adjusted full-year earnings have been lowered to a range of $1.25 to $1.40 per share, from a prior range of $2.10 to $2.25 a share. Analysts had expected Gap to earn $2.20 per share, Refinitiv said.
Gap said its revised outlook takes into account roughly $550 million to $650 million of lost sales from supply chain constraints and about $450 million in air freight costs for the year.
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