By Sandeep Aggarwal / Source: DenimsandJeans

gap

The San Francisco-based company has been struggling to keep pace with the ,so-called ,fast apparel retailers such as UNIQLO and H&M in recent years. The loss of Old Navy boss Stefan Larsson to head luxury fashion brand Ralph Lauren in September hasn’t helped. Larsson was widely credited with turning around Gap’s budget retail brand.

Old Navy sales dropped 8 percent in the three months ending in January, down from 11 percent growth in the same quarter of the previous year, the company said . Banana Republic revenue dropped 14 percent compared with 1 percent year-over-year growth. Gap brand sales narrowed losses, to negative 3 percent from negative 6 percent, indicating some stabilization in the company’s namesake brand. Net sales in January were $813 million, down from $888 million in the same month last year.

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The overall revenue of the company is almost stable with a slight increase though in 2015 increasing to $16.43 billion. However, this reflects poorly when compared with growth in companies like Uniqlo and H&M.

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Net income fell from $1.28 billion to $1.24 billion showing the pressure the company is facing in its margins.

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However, 2016 is more disturbing for the company and sales expected to go down further this year. As far as the January Comparable Sales Results is concerned ,Gap Inc.’s comparable sales for January 2016 were down 8 percent versus negative 3 percent last year. Comparable sales by global brand for January 2016 were as follows:

Gap Global: negative 6 percent versus negative 9 percent last year

Banana Republic Global: negative 17 percent versus positive 2 percent last year

Old Navy Global: negative 6 percent versus positive 3 percent last year

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Looking at the Gap Inc.’s comparable sales for the fourth quarter of fiscal year 2015 , we find that these show the same trend as we see in Jan’2016. Sales were down 7 percent versus positive 2 percent last year. Comparable sales by global brand for the fourth quarter were as follows:

Gap Global: negative 3 percent versus negative 6 percent last year

Banana Republic Global: negative 14 percent versus positive 1 percent last year

Old Navy Global: negative 8 percent versus positive 11 percent last year

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Gap Inc. shares reported lower year-over-year sales and its share price reached to the lowest level at $25.45 . Grim quarterly sales numbers suggest the problems facing the company’s Gap and Banana Republic outlets might be spreading to Old Navy, which had performed well through most of last year.

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