Gap's Holiday quarter sales lift 1%, Banana Republic narrows losses
Gap Inc said group fourth-quarter sales gained slightly for the Holiday period, on the back of a positive January trade and improvements in its struggling Banana Republic brand.
The San Francisco-based apparel retailer said net sales for the fourth quarter increased 1 percent to $4.43 billion compared with $4.39 billion last year. This was assisted by a 2 percent gain in revenues for the month of January, said Gap Inc.
“Against a challenging retail backdrop, we’re pleased to report growth in our top-line and comp sales during the critical holiday quarter,” said Art Peck, chief executive officer, Gap Inc. “We remain focused on actions that will strengthen our brands and recapture market share.”
For the last quarter of 2016, Gap Inc.’s comparable sales were up 2 percent compared with a decline of 7 percent last year. Old Navy gained 5 percent (versus negative 8 percent last year) and Banana Republic narrowed revenues to a 3 percent loss (versus negative 14 percent last year). The Gap brand remained flat, compared to a 3 percent loss last year.
For January, total comparable sales were up 1 per cent compared with a decline of 8 percent last year. Old Navy Global sales swung from a 6 percent loss last year to grow 2 percent this quarter, while Banana Republic made a searing comeback, down just 4 percent, compared to 17 percent last year. Gap grew 3 percent, compared to a 6 percent downswing last year.
For fiscal year 2016, the company now expects its reported diluted earnings per share to be in the range of $1.68 to $1.69. On an adjusted basis, Gap Inc. now expects its full-year 2016 adjusted earnings per share to be in the range of $2.01 to $2.02, it said.
The results follows a full-year 2016 packed with change for Gap. The firm recently let go of its Banana Republic brand head, Andi Owen, who had been with the group since 1991. In 2016, a number of Banana Republic stores were closed outside of the US, including 8 stores in the UK.
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