Gap Q1 sales top pre-Covid levels, swings to profit

Image: Gap, Facebook Sales at US fashion and lifestyle retailer Gap topped pre-Covid levels in the first quarter of the year as its markets opened back up, leading to a hike in its full-year outlook. The company said net sales across its brands for the first quarter ending May 1 were up 89 percent to 3.99 billion dollars compared to last year when the pandemic was in full swing. Compared to two years ago - or pre-Covid levels - net sales were up 7.8 percent. On a comparable basis, sales were up 28 percent compared to last year and up 13 percent compared to 2019. The company swung to a net income of 166 million dollars for the quarter compared to a loss of 932 million dollars a year earlier. Breaking the numbers down by brand, the retailer’s namesake label reported a 29 percent increase in comparable sales compared to last year but a 1 percent decrease compared to 2019. Comparable sales at Banana Republic were down 4 percent year-over-year and down 22 percent versus 2019. Athleta and Old Navy shine But the company’s clear winners were its Athleta and Old Navy brands this quarter, with the former reporting a comparable sales increase of 27 percent compared to last year and 46 percent on two years ago, and the latter reporting a comparable sales increase of 35 percent year-over-year and a 25 percent increase compared to 2019. Gap CEO Sonia Syngal was upbeat on the company’s recovery, particularly with the strength of Old Navy and Athleta and the “healthy and growing Gap business in North America”. She also hailed the company’s 82 percent online growth during the quarter, despite the return of store traffic. She said in a release: “And while Active and Fleece continue to soar, we saw a resurgence in summer fashion with dresses rebounding, showing that customers are emerging from the crisis wanting to express their style without sacrificing the comfort and digital convenience they’ve become accustomed to.” On the back of the strong results, Gap has raised its full-year outlook and now expects sales growth to be in the low-to mid-twenty percent range versus 2020.
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