Gap reports upbeat quarterly sales on improving demand for Old Navy apparel
March 7 (Reuters) - Gap beat Wall Street expectations for fourth-quarter sales on Thursday, buoyed by strong demand on improved product offerings at its Old Navy and namesake brands during the holiday season.
CEO Richard Dickson's plans to push ahead with reinventing Gap's brands, mainly Old Navy, have helped drive consumer interest in its clothing and accessories.
The Banana Republic parent had seen sales slump in the past several quarters as customers moved to competitors such as Amazon.com and Shein that offer compelling product assortments.
Fourth-quarter comparable sales at the Gap brand rose 4% and Old Navy saw a 2% increase, while Athleta and Banana Republic sales slumped 10% and 4%, respectively.
However, Gap expects fiscal 2024 net sales to be flat compared with $14.89 billion in 2023. Analysts had expected a 0.48% rise, according to LSEG data.
Gap's forecast signals that improving its product assortments mainly at Athleta and Banana Republic could take longer than expected.
"Re-establishing Banana Republic will take time and there is work to be done to better execute many of the fundamentals," the company said on Thursday.
"They can edit and curate better, and can work color and color combinations better," Leslie Ghize, executive vice president of Coller Davis & Co, a division of retail consultancy Doneger Tobe said.
Gap's fourth-quarter net sales rose 1.3% to $4.30 billion, beating estimates of $4.22 billion.
The company posted a net income of $185 million, or 49 cents per share, in the quarter, compared to a loss of $273 million, or 75 cents per share, a year earlier. (Reporting by Ananya Mariam Rajesh in Bengaluru and Kate Masters in New York; Editing by Shounak Dasgupta)
