US clothing and accessories retailer Gap recorded $3.5 billion in net sales for the first trimester (Q1) in fiscal 2022 (FY22), down 13% from the same period in 2021.
The retailer has seen its net sales hit by a variety of factors, including store closures and the shift of the company’s European operations to a partnership model.
Sales of the Old Navy and Gap brands fell 19% and 11% respectively, while Banana Republic and Athleta saw increases of 24% and 4% respectively.
In the three months to April 30, Gap’s online sales fell 17% from a year ago and accounted for 39% of its total net sales.
Gap saw store sales fall 10% in the first quarter from the same period a year earlier, while its gross margin fell 930 basis points to 31.5% year-over-year .
The company’s operating loss for the quarter was $197 million and its net loss was $162 million, or $0.44 for each diluted share.
Sonia Syngal, CEO of Gap, said: “While we are disappointed to deliver results below expectations, we are confident in our ability to navigate headwinds and re-stabilize the Old Navy business to continue the progress of our long-term strategy.
“We remain rooted in our belief in our iconic purpose-driven brands – Old Navy, Gap, Banana Republic and Athleta – and are focused on continuing to progress against our Power Plan strategy and getting back on track. to ensure growth, margin expansion, and value for our shareholders over the long term.
For the full year, Gap expects revenue to decline in the low to mid-single digit range from a year ago and has forecast a gross margin of between 36.5% and 37.5%.
The retailer owns several major brands, including Old Navy, Gap, Banana Republic and Athleta. It operates 3,414 stores in more than 40 countries.