The US clothing group Gap Inc. once again had to accept a decline in sales in the first quarter of the 2023/24 financial year, but was able to make significant progress in terms of earnings.
CFO Katrina O’Connell also believes the company is “well positioned to achieve further sustained margin improvements” given the extensive austerity measures announced in recent months. The results published on Thursday evening were well received by investors: Gap’s share price immediately rose by more than ten percent.
For the 13 weeks ended April 29, consolidated revenue was $3.23 billion, down 6 percent from the prior-year quarter. According to the company, in addition to the adverse economic conditions, the sale of the China business of the Gap brand in January and the discontinuation of the Yeezy Gap line also contributed to the decline.
All group brands had to accept a drop in sales. Old Navy revenues were down 1% to $1.8 billion and Gap revenues were down 13% to $692 million. Banana Republic came to 432 million US dollars (-10 percent), Athleta to 321 million US dollars (-11 percent).
Thanks to the far-reaching savings measures, the group was able to significantly reduce its costs and achieve significantly higher margins than in the same period of the previous year. Therefore, the operating loss shrank by 95 percent to ten million US dollars. The net loss was reduced from 162 to 18 million US dollars (17 million euros). Adjusted for special items, which included high restructuring costs related to the ongoing reform program, net income was $3 million.