The Gap Inc. reported a 9% decline in online sales in its fiscal first quarter — more than two times worse than the 4% drop at brick-and-mortar locations in the same period.
Net sales fell 6% versus a year earlier to $3.28 billion.
Comparable sales declined by 3% across Gap’s four brands. That was due mostly to large drops at Banana Republic and Athleta, while Old Navy fell slightly and the Gap brand posted a 1% increase. The results suggest that Gap will need to do more beyond cost-cutting measures to reposition its brands for longer-term growth.
“We continue to take the necessary actions to drive critical change at Gap Inc., ultimately getting us back on a path toward delivering consistent results long-term,” interim CEO Bob Martin said in a statement.
The Gap is No. 20 in the Digital Commerce 360 Top 1000 database, which ranks retailers by annual web sales.
Gap’s margin beats expectation
Gross margin in the period came in above the average analyst estimate, while adjusted earnings per share were slightly positive, compared with an expected loss. The improvement was due in part to lower air freight expense and fewer discounts, the company said. Gap has also reduced headcount and trimmed expenses.
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