The US fashion group Gap Inc., which owns the lifestyle brands Old Navy, Gap, Banana Republic and Athleta, reports a two percent increase in net sales to $4.04 billion in the third quarter.
Reported operating income was $186 million; the reported operating margin was 4.6 percent. Reported operating income and margin includes a gain of $83 million related to the sale of the Company’s UK distribution center and an impairment charge of $53 million related to Yeezy Gap.
The main growth drivers in the third quarter (as of October 29, 2022) are Banana Republic and Athleta, the smallest brands in the portfolio. The net sales of the fashion brand Banana Republic increased by eight percent to 517 million US dollars compared to the previous year. The women’s sports brand Athleta achieved an increase of six percent to 340 million US dollars.
The brand with the highest turnover is Old Navy with net sales of 2.1 billion US dollars, which was only able to increase by two percent. Gap generated net sales of $1.04 billion, flat compared to the same period last year.
Commenting on the outlook for fiscal 2022, Katrina O’Connell, Executive Vice President and Chief Financial Officer of Gap Inc. said, “While our third quarter results underscore the initial progress we are making in realigning our assortments and destocking , we remain cautious for the remainder of fiscal 2022 given the uncertain consumer and increasingly promotional environment.”