The Gap clothing chain returned to profit, exceeding expectations

The US clothing chain GAP returned to profit in the first quarter of the current business year, exceeding market expectations. It also managed to achieve better-than-expected results in the area of ​​sales. In these, the company returned to the pre-pandemic level, which was due to increased customer interest in the Old Navy and Athleta brands. Gap said at the end of this week that in the first quarter of the 2021/2022 business year, ie from February to the end of April, it achieved a profit of USD 166 million (EUR 136.72 million), which is 43 cents per share. In the same period last business year, the company reported a loss of $ 932 million ($ 2.51). Excluding non-recurring items, the clothing company recorded a profit of $ 186 million (48 cents / share). The results were significantly better than expected by economists, who expected a loss per share of 5 cents. Profit was supported by a significant increase in sales, in which Gap again exceeded market expectations. They reached $ 3.99 billion, compared to $ 2.11 billion in the first quarter of 2020/2021, in which the results were affected by the new coronavirus pandemic. Economists expected their growth to only $ 3.45 billion. From the individual brands of the company, sales attracted mainly the Old Navy and Athleta brands. Comparable sales for the Old Navy brand increased by 35 percent year-on-year and increased by 25 percent compared to the pre-pandemic February to April 2019. Compared to the pre-pandemic period, the Athleta brand was even more successful. Compared to the first quarter of 2019/2020, comparable sales at this brand increased by up to 46 percent. They increased by 27 percent year on year. Sales of the Gap brand of the same name also increased significantly year-on-year, by 29 percent. However, compared to the same period two years ago, they decreased by 1%, mainly due to weaker sales on foreign markets. On the other hand, the North American market also increased compared to the pre-pandemic period, namely by nine percent. In response to the latest results, Gap has improved its full-year sales forecast. Originally expecting the percentage growth in sales to reach the middle to upper level of the second ten, now it expects that it will be the lower to middle level of the third ten.