Gap shares drop 8% on weak Q4 results
By Davit Kirakosyan
Gap Inc (NYSE:GPS) shares fell more than 8% after-hours following the company’s reported Q4 results, with EPS of ($0.75) and revenue of $4.24 billion (down 6% year-over-year) coming in worse than the consensus estimates of ($0.47) and $4.36B, respectively.
Comparable sales were down 5% year-over-year. Store sales fell 3% year-over-year, while online sales drop 10% and represented 41% of total net sales.
Old Navy Q4 net sales fell 6% year-over-year to $2.2B, with comparable sales declining 7%. Gap net sales fell 9% to $1.1B, with comparable sales declining 4%. Banana Republic net sales of $578 million were down 6% year-over-year, with comparable sales falling 3%. Athleta net sales of $436M were down 1%, with comparable sales falling 5%.
“While we are better positioned as we enter fiscal 2023, we continue to take a prudent approach to planning and managing our business in light of the continued uncertain consumer and macro environment,” said Katrina O’Connell, CFO of Gap.
For Q1/23, management expects net sales to decline in the mid-single digit range year-over-year. For the full year, the company expects net sales to decrease in the low to mid-single-digit range year-over-year. The company expects Q1 and full 2023 year gross margin expansion compared to the prior year.
The company also announced that Mary Beth Laughton, President and CEO of Athleta is exiting the business, effective today.