Gap’s online sales grew 1.4% in the fourth quarter.

Online sales were up slightly and offline sales were off by a lot for Gap Inc. in the fourth quarter and its full fiscal year that ended Jan. 30.

Gap, No. 18 in the 2015 Internet Retailer Top 500, reported Thursday online sales of $2.530 billion during its fiscal year, up 1.1% from $2.503 billion a year earlier. For the fourth quarter, the apparel retailer booked $803 million in web sales, an increase of 1.4% from $792 million a year earlier.

Total sales were off 7% for the fiscal year and 4% for the fourth quarter, Gap says. When taking out the gains from web sales, sales in the company’s bricks-and-mortar sales declined 4.8% for the year and 8.6% for the fourth quarter. Part of the decline in store sales came from the closing of 73 stores in the fourth quarter.

Gap, which generated 23% of its sales overseas in the 2015 fiscal year, mostly in Canada and Japan, attributed $363 million in the revenue shortfall to the strong dollar, which decreases the value of sales in foreign currencies.

“With a year of transition behind us, I’m confident that we have the right strategies in place to fuel our long-term growth,” Gap CEO Art Peck said in a statement accompanying the earnings release. “Our brands are strengthening their connection with customers through digital, and especially in mobile, enhancements that create richer experiences whether shopping online or in stores, or any combinations of channels.”


Peck told analysts that more than half of Gap’s online traffic now comes from mobile devices, though he did not get more specific. He said mobile shopping is having a big impact on the retailer’s strategy.

“Historically in this business, the moment of truth was when a customer crossed the leased line into a store,” Peck said, according to a transcript of the earnings call with analysts provided by SeekingAlpha. “Today, as a company, we are increasingly seeing the moment of truth is when a customer, through their phone, comes into our digital store and we either win or lose their affection, their engagement and ultimately their sales if we win or lose at that moment of truth.

“That represents an opportunity because a great majority of that traffic is incremental, but it also means that we offer the customer an emotional, immersive, holistic, engaging brand experience along with what we have historically done extremely well, which is a very efficient e-commerce transactional experience.”

While Gap did not provide details on sales to mobile shoppers, Internet Retailer estimates Gap generated $396 million in sales placed through smartphones and tablets in 2015, an increase of 10% from $360 million in 2014, according to Gap is No. 53 in the 2016 Mobile 500, which ranks global retailers by their mobile sales.

For the 2015 fiscal year ended Jan. 30, Gap reported:

  • Net sales of $15.797 billion, down 3.9% from $16.435 billion in the prior fiscal year.
  • Comparable-store sales were down 6% for the Gap brand, off 10% for Banana Republic and flat for Old Navy.
  • Net income of $920 million, a decrease of 27.1% from $1.262 billion.

For the fourth quarter ended Jan. 30, Gap reported:

  • Net sales of $4.385, off 6.9% from $4.708 billion a year earlier.
  • Net income of 214 million, a decrease of 32.9% from $319 million.