The ongoing supply chain hangups, increased inflation and remnants of the COVID-19 pandemic conspired to lead apparel retailer Gap Inc. — parent company of Old Navy, Banana Republic and Athleta — to fall short of its first-quarter earnings targets for the three months ending April 30.

The company is moving forward with its plan to open about 30 to 40 stores each for Old Navy and Athleta in fiscal year 2022. It also shared its 350-store closure plan that will shutter about 50 Gap and Banana Republic stores in North America during the year.

“Our Q1 results and updated fiscal 2022 outlook primarily reflect industry-wide headwinds as well as challenges at Old Navy that are impacting our near-term performance,” said Sonia Syngal, Gap CEO, in the company press release Thursday (May 26).

“While we are disappointed to deliver results below expectations, we are confident in our ability to navigate the headwinds and re-stabilize the Old Navy business in order to deliver continued progress on our long-term strategy,” she said. “We believe that we can navigate this period of acute disruption and build an even more resilient and agile company.”

Gap saw its Q1 net sales drop 13% year-over-year to $3.5 billion, a function of a string of store closures across the brands and a lack of economic stimulus money in the mix this year. Comparable sales were down 14% year-over-year in Q1, while online sales fell 17% and store sales dipped 10% from 2021 levels.

The company ended the quarter with 3,414 store locations in more than 40 nations, of which 2,825 were company-run.

Related: Urban Outfitters Sees Increased Foot Traffic, Dip in eCommerce Sales

Earlier this week, Urban Outfitters — which includes Anthropologie, BHLDN, Free People, FP Movement, Terrain, Urban Outfitters, Nuuly and Menus & Venues — said its total inventory for the three-month period ending April 30 is up almost 32% ($152.2 million) year-over-year.

Inventory costs increased 35% in that period for the apparel retailer because of supply chain snags, raw material cost hikes, longer lead times and lower-than-expected Q1 sales.

Urban Outfitters also reported double-digit growth in its retail store sales in its Q1 earnings report, a reflection of the lessening of quarantines and temporary store closures.



About: PYMNTS’ survey of 2,094 consumers for The Tailored Shopping Experience report, a collaboration with Elastic Path, shows where merchants are getting it right and where they need to up their game to deliver a customized shopping experience.

Source link

Previous articleThis negotiating season, will teacher pay raises meet expectations?
Next articleHow an Organized Republican Effort Punishes Companies for Climate Action