(AOF) – Gap gained 4.46% to 9.95 dollars the day after the presentation of mixed quarterly results. The clothing distributor is facing a difficult economic environment and strong competition from online players, such as the Chinese Shein, which offers very cheap products. “We find that the brands that appeal to our customers are TJ Maxx, Amazon and Shein. We see these companies gaining market share,” said Katrina O’Connell, Chief Financial Officer during the analyst call.
In the second quarter, Gap reported net income of $117 million, or 32 cents per share, compared with a net loss of $49 million and -13 cents a year earlier. Adjusted for exceptional items, earnings per share came out at 34 cents, well above the consensus of 9 cents.
On the other hand, activity contracted more than expected. Turnover fell by 8% to 3.55 billion dollars while the market was targeting 3.58 billion dollars. In-store sales fell by 7% and online by 11%. The group’s revenues fell by 6% on a comparable basis, a key indicator for the sector.
“The company’s outlook takes into account the continued uncertainty in the consumer and macroeconomic environment,” the US company said.
The owner of the Old Navy and Banana Republic brands anticipates revenue down 10% to 15%. Over the full year, Gap is now more pessimistic than before. The company forecasts a fall in its revenues of around 5% whereas it previously expected a decline of less than 5%.
© 2023 Agence Option Finance (AOF) – All rights reserved by AOF. AOF collects its data from the sources it considers the most reliable. However, the reader remains solely responsible for their interpretation and for the use of the information made available to them. Thus the reader must hold AOF and its contributors harmless from any claim resulting from this use. Agence Option Finance (AOF) is a brand of the Option Finance group
Did you like this article ? Share it with your friends with the buttons below.
