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Gap Q3 comparable sales decline 3 percent

By Prachi Singh

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Business

Gap’s comparable sales for the third quarter 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. Net sales decreased 2 percent to 3.80 billion dollars compared with 3.86 billion dollars for the third quarter last year.

“I’m pleased to see improved product across our brands, as well as areas of healthier merchandise margins, even against the backdrop of challenging traffic trends during the quarter,” said Art Peck, CEO, Gap in a statement, adding, “As we move into the holiday season, our teams are sharply focused on execution and delivering great experiences across the portfolio.

Third quarter comparable sales results

Comparable sales at Gap Global were negative 8 percent, which the company said included an estimated negative impact from the Fishkill distribution center fire of approximately 4 percentage points, versus negative 4 percent last year. Banana Republic Global comparable sales were 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, while Old Navy Global was positive 3 percent, including an estimated negative impact from the Fishkill distribution center fire of approximately 1 percentage point, versus positive 4 percent last year.

Third quarter diluted earnings per share at Gap were 0.51 dollars and earnings on adjusted were 0.60 dollar, excluding a 0.09 dollar impact from restructuring costs related to store closure and streamlining measures previously announced by the company on May 19, 2016.

Excluding restructuring costs, the company continues to expect its adjusted operating margin to be about 8.5 percent in fiscal year 2016. During the third quarter, the company opened 36 and closed 28 company-operated stores. Square footage of company-operated stores was down about 2 percent compared with the third quarter of fiscal year 2016. The company now expects net closures of about 65 company-operated stores in fiscal year 2016 and a 3 percent reduction of square footage as compared to last year.

Picture:Old Navy

Gap