Home / Business and Economy / Gap Profit Dips Amidst Athleta Sales Slump
Gap Profit Dips Amidst Athleta Sales Slump
6 Mar
Summary
- Gap's quarterly profit fell to $171 million, impacting overall results.
- Sales declined significantly at the Athleta brand, continuing a negative trend.
- The company plans to grow sales by 2% to 3% in the upcoming fiscal year.
Gap's latest quarterly earnings revealed a profit of $171 million, or 45 cents per share, a decrease from the previous year's $206 million. This dip was primarily influenced by ongoing sales declines within the Athleta brand, which saw a 10% decrease in same-store sales. The company's other brands performed better, with Gap and Old Navy reporting positive same-store sales growth.
Despite the profit reduction, total revenue rose by 2% to $4.24 billion, aligning with market predictions. Gap's CEO, Richard Dickson, indicated the company is entering a new phase of its transformation, concentrating on strengthening its core apparel offerings. For the upcoming fiscal year, Gap projects sales growth between 2% and 3% and earnings per share of approximately $2.71 to $2.86.
In other financial news, Gap announced a $1 billion share repurchase program. This move comes after the company recognized a net gain of $313 million from a recent legal settlement, part of which will be donated to the Gap Foundation. The company's stock experienced a notable drop in after-hours trading following the earnings announcement.
