The US clothing group Gap Inc. suffered declines in sales and profits in the third quarter of the 2023/24 financial year, but was able to exceed market expectations.
CEO Richard Dickson, who has led the group of companies since August, was satisfied with the figures published on Thursday evening: The group had delivered “solid results”, expanded its market share and made progress in margins, he explained in a statement.
All corporate brands have to accept losses in sales
In the 13 weeks ending October 28, the parent company of the Gap, Old Navy, Banana Republic and Athleta brands reported sales of $3.77 billion (€3.47 billion). This corresponded to a decrease of seven percent compared to the same quarter of the previous year. According to the company, around two percentage points of this was due to the sale of the Gap China division to the local e-commerce specialist Baozun Inc.
All Group brands suffered losses: Old Navy’s revenue fell by one percent to $2.13 billion compared to the same period last year, Gap’s revenue fell by 15 percent to $887 million, and Banana Republic’s revenue fell by eleven percent to $460 million US dollars and at Athleta by 18 percent to 279 million US dollars.
The austerity program is having an impact
Thanks to a higher gross margin and reduced operating costs through drastic cost-cutting measures, the group’s operating profit rose by 34 percent to $250 million. However, net profit fell by 23 percent to 218 million US dollars (201 million euros) because the clothing supplier benefited from a tax credit in the same quarter of the previous year.