(AOF) – Gap, whose title jumped 8.6% in preview, reported a turnover and a profit better than expected in the third quarter. Despite high inflation, demand for clothing is strong. Its adjusted EPS was up 163% to $0.71, with an adjusted operating margin down 0.4 points to 3.9%. Revenues totaled $4.04 billion, beating market expectations by 6%, from $3.94 billion for the comparable period a year prior.
Like-for-like sales rose 1% as analysts expected a decline.
The retailer with the brands Old Navy or Banana Republic is at the same time issuing a warning on its results for the fourth fiscal quarter, a crucial holiday period.
“While our third quarter results reflect the initial progress we are making to rebalance our assortments and reduce inventory, we continue to take a cautious approach in light of consumer uncertainty and the growing environment. promotional as we look ahead to the remainder of fiscal 2022,” said Katrina O’Connell, executive vice president and chief financial officer.
And to continue: “In the short term, we remain focused on the actions necessary to reduce inventory, rebalance our assortments to better meet the changing needs of consumers, aggressively manage and reassess our investments, and strengthen our balance sheet.”
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big concerns
According to the Federation of specialized trade, Procos, activity from January to May is very significantly down compared to the same period in 2019, at – 8.8%. Store traffic in May 2022 remained lower than in May 2019, but the decline was limited to 6.5%, much better than in April (-19.6% compared to April 2019). In a very uncertain context, several elements weigh on the profitability of companies, in particular the increase in the cost of electricity and the indexation of rents, even if the composition of the ILC (commercial rent index) has been modified. Previously it was composed of 50% inflation, 25% construction cost index and 25% change in retail turnover. From now on, it will only take into account inflation and the cost of construction because the previous formula included sales made by the ‘pure players’ of the Net, which increased the rents of physical stores.