Gap Q1 brand sales skyrocket as Old Navy disappoints
Gap Inc. delivered its ninth consecutive quarter of positive comp sales as the strong performance at its namesake brand helped offset sluggish sales at its largest banner, Old Navy.
The apparel retailer reported net income $339 million, or $0.90 per share, for the quarter ended May 2, compared with $193 million, or $0.51 per share, in the year-ago period. Excluding one-time items related to a legal settlement, Gap earnings per share were $0.38.
Operating income was $445 million, up from $260 million in the year-ago period, with the operating margin last quarter at 12.7 percent. Net income was $339 million, up from $193 million in the year-ago period.
First-quarter sales rose to $3.50 billion, up from $3.46 billion a year earlier. Comparable sales rose 2%, which marked the ninth consecutive quarter of gains. Store sales up 3% compared to last year.
Here’s a breakdown of Gap Inc. sales by banner.
Old Navy: Sales rose 1% to $2.0 billion. Comparable sales were up 1%. The company noted noted a weaker customer response to women's dresses was weaker.
Gap: Net sales rose 19% to $796 million. Comparable sales were up 10%. The brand strengthened its presence in destination categories, including denim, fleece and kids and baby.
Banana Republic: Sales rose 1% to $431. Comparable sales were up 2%, the fourth consecutive quarter of positive comps.
“The brand delivered its fourth consecutive quarter of positive comparable sales, with growth across men’s and women’s fueled by continued elevation in merchandising and storytelling,” the company stated.
Athleta: Sales fell 12% to $270 million. Comparable sales were down 11%. Gap said the brand remains focused on rebuilding for the long term “and launching a stronger, reimagined assortment in the second half of the year."
“In the first quarter, Gap Inc. delivered continued progress against our strategic priorities, including further market share gains and achieving our ninth consecutive quarter of positive comparable sales,” said president and CEO Richard Dickson. “Gap brand delivered a standout quarter with a double-digit comp, marking one of the brand’s strongest performances in over two decades. Performance across our other brands was varied, reflecting both the different stages of their transformation and some brand-specific dynamics.”
The company ended the quarter with nearly 3,500 store locations in about 35 countries, of which 2,477 were company-operated.
