Gap Inc.’s profits fell in the third quarter — and more than Wall Street anticipated — but the company achieved a certain balance in sales as e-commerce helped offset store closures.
Third-quarter net income fell 32.1 percent to $95 million, or 25 cents a share, from $140 million, or 37 cents, a year earlier. The bottom line, however, fell 7 cents shy of the 32 cents analysts projected, pressuring Gap shares, which fell 9.7 percent to $24.22 in after-hours trading. “Since the beginning we have led the casualisation of American wardrobe,” she said. “Whether it was introducing khakis and the notion of casual Fridays to the New York Stock Exchange in the late 90s, or a modern version of the Gap khakis making the headlines during election coverage earlier this month — it’s about more than just a pair of pants. It’s about relevance.”
The company picked up more than six million customers in the third quarter for a total of 176 million and is working now to strengthen its relationships with shoppers in new ways. “One of the biggest value drivers of our power plan 2023 is our real estate restructuring strategy, largely pointed at closing select stores across Gap and Banana Republic,” Syngal said.
The company has also spent over $100 million on health and safety measures in its stores — but the focus on the web is only growing. In the third quarter, Athleta led the portfolio, with sales up 35 percent, followed by the much larger Old Navy, which increased 17 percent.
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