Gap Inc. (NYSE: GPS) does not boast about huge online success or claim e-commerce is a large and growing part of its revenues. During a holiday season in which online sales have become of paramount importance and traffic to stores is falling, Gap’s most recent announcements have been about poor earnings and store closings. Gap is in position to be hammered this holiday season.
In the most recently reported quarter, Gap revenue dropped from $3.9 billion in the year-ago period to $3.8 billion. Net income for the same periods fell from $248 million to $204 million. Same-store sales:
Results Gap Inc.’s comparable sales for the third quarter of fiscal year 2016 were down 3 percent, including an estimated negative impact from the Fishkill distribution center fire of approximately 2 percentage points, versus a 2 percent decrease last year.
Comparable sales by global brand for the third quarter were as follows:
x Gap Global: negative 8 percent, including an estimated negative impact from the Fishkill distribution center fire of approximately 4 percentage points, versus negative 4 percent last year
x Banana Republic Global: negative 8 percent, including an estimated negative impact from the Fishkill distribution center fire of approximately 2 percentage points, versus negative 12 percent last year
x Old Navy Global: positive 3 percent, including an estimated negative impact from the Fishkill distribution center fire of approximately 1 percentage point, versus positive 4
Investors have not supported the stock, even as management has lowered expenses via store closings. Shares are down 6.5% over the past year to $25.57. The S&P 500 is up 6% over the same period.
Gap’s CEO, Art Peck, did not offer much comfort:
As we move into the holiday season, our teams are sharply focused on execution and delivering great experiences across the portfolio. … Looking forward, we remain dedicated to utilizing our scale advantage in supply chain, as well as through knowledge sharing, in order to drive product innovation across brands and categories.
Which means nothing.
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