Despite the positive momentum, Gap anticipates that fiscal 2024 net sales will remain flat compared to $14.89 billion in 2023, contrary to analysts' expectations of a 0.48 per cent rise.
In Q4 FY24, Gap’s comparable sales increased by 4 per cent while those of Old Navy experienced a 2 per cent growth. However, sales of the brands Athleta and Banana Republic declined by 10 per cent and 4 per cent respectively.
Gap reported net sales of $4.30 billion, a 1.3 per cent increase surpassing estimates of $4.22 billion during the quarter. Additionally, the company reported a profit of 49 cents per share, outperforming estimates of 23 cents per share.
Gap's gross margin surged by 38.9 per cent, a substantial increase of 530 basis points, driven by lower supply-chain costs related to freight and manufacturing, as well as controlled promotions and price adjustments on select products like leggings and skinny jeans.
The company's forecast suggests that the process of enhancing product assortments, particularly at Athleta and Banana Republic, may take longer than initially anticipated.
Richard Dickson’s CEO, strategic initiatives to revitalise Gap's brands, particularly Old Navy, have successfully attracted consumer interest in its apparel and accessories. The company had witnessed a decline in sales over the past few quarters as customers shifted towards competitors like Amazon.com and Shein, which offer diverse product assortments.
