Gap Inc (NYSE: GPS) stock rose over 0.4% on 28th August, 2020 (as of 10:22 am GMT-4; Source: Google finance) after the company reported a surprise 13% increase in quarterly comparable sales as consumers stuck at home due to the COVID-19 pandemic bought more of its Old Navy and Athleta clothing online. Same-store sales rose 13%, compared with analysts’ forecast fall of a 20.97%, according to IBES data from Refinitiv. Gap has reported second-quarter net loss of $62 million compared to a profit of $168 million, a year earlier. The company has added 3.5 million new digital customers during the period, with about 50% online penetration. The company has brought in $130 million in sales during the second quarter by making face masks, selling those to both individuals and businesses in bulk. The sales at its namesake Gap brand had declined 28%, consisting of a 75% increase online and a 55% decline in stores.
Moreover, at Old Navy, which has been one of Gap’s strongest performing brands of late, sales declined by 5%, including of 136% growth online and a 36% drop at stores. Banana Republic sales fell 52%, consisting of a 26% increase online and a 71% decline in stores. Within Athleta, Gap’s athletic apparel brand for women that competes with the likes of Lululemon and Nike, sales rose up 6%, making Athleta the only division within GPS to see overall revenue increase. Athleta’s online sales grew by 74%, while store sales had fallen down 45%.
Meanwhile, GPS plans to close over 225 unprofitable Gap and Banana Republic stores globally as a part of its restructuring plan.
GPS in the second quarter of FY 20 has reported the adjusted loss per share of 17 cents, beating the analysts’ estimates for the adjusted loss per share of 41 cents, according to IBES data from Refinitiv. The company had reported 18 percent fall in the adjusted revenue to $3.28 billion in the second quarter of FY 20, beating the analysts’ estimates for revenue of $2.91 billion. The company has ended the quarter with $2.2 billion in cash and cash equivalents. The company has recently secured a $1.87 billion asset-based revolving credit facility, which replaced its prior $500 million unsecured revolving credit facility, which it has yet to borrow against and does not expect to access this fiscal year. The company has not provided an earnings outlook for 2020 at this time, due to the uncertainty from the global pandemic.