{"id":85606,"date":"2023-11-17T05:00:17","date_gmt":"2023-11-17T10:00:17","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/gap-shares-rally-as-discounted-prices-ease-and-old-navy-sees-sales-gains\/"},"modified":"2023-11-17T05:00:19","modified_gmt":"2023-11-17T10:00:19","slug":"gap-shares-rally-as-discounted-prices-ease-and-old-navy-sees-sales-gains","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=85606","title":{"rendered":"Gap shares rally as discounted prices ease and Old Navy sees sales gains"},"content":{"rendered":"
\n

Shares of Gap Inc. launched higher after hours Thursday after the clothing retailer reported third-quarter results that beat expectations, as easing pressure to cut prices and a rare same-store sales gain from Old Navy offset mixed store performances and lingering holiday-season caution. <\/p>\n

The company \u2014 which also runs Old Navy, Banana Republic and the women\u2019s athletic apparel chain Athleta \u2014 reported earnings as it tries to refresh consumer perceptions of its stores, amid concerns of flagging relevance. It reported after higher prices for basics last year vacuumed up a bigger chunk of shoppers\u2019 savings, leaving less money to spend on things like clothing. <\/p>\n

\n

However, Walmart Inc.
\n WMT,
\n -8.09%<\/bg-quote>
\n on Thursday said it expected a \u201cperiod of deflation\u201d up ahead, while management at Target Corp.
\n TGT,
\n -0.40%<\/bg-quote>
\n on Wednesday expressed hope that \u201cmoderating\u201d prices for essentials could free up more spending for things like clothing and other more discretionary items. <\/p>\n

Gap
\n GPS,
\n -2.84%<\/bg-quote>
\n on Thursday cited \u201cimproved promotional activity\u201d in the third quarter, a reference to the competitive markdowns that have spread across the clothing-retail industry over the past year due to weaker demand. And it said that a leaner inventory, as its stockpiles of unsold goods fell 22%, and a trendier clothing selection helped keep it from slashing prices more aggressively during the period. Gap\u2019s margin profile improved in the process. <\/p>\n

Shares jumped 17% after hours. <\/p>\n

Gap reported third-quarter net income of $218 million, or 58 cents a share, compared with $282 million, or 77 cents a share, in the same quarter last year. Adjusted for restructuring costs, Gap earned 59 cents a share.<\/p>\n

Revenue fell 7% to $3.8 billion, weighed by the sale of Gap China. Same-store sales slipped 2%. <\/p>\n

Analysts polled by FactSet expected the clothing chain to report adjusted earnings per share of 20 cents on revenue of $3.61 billion, with same-store sales down 8.7%. <\/p>\n

However, same-store sales at Old Navy, the company\u2019s biggest store chain, rose 1%, helped by \u201cstrength\u201d in women\u2019s and children\u2019s apparel and an \u201cacceleration\u201d in activewear, after rising prices in prior months weighed on demand among low-income customers. Same-store sales fell at Gap, Banana Republic and Athleta during the quarter. <\/p>\n

Heading into the results, analysts had expressed concern about demand for apparel. And while discounts help customers, they hurt financials, and Gap executives tried to temper Wall Street\u2019s expectations for the end of the year. <\/p>\n

Despite the less-vigilant price-chopping in the third quarter, they said they expected promotions for the holiday-season quarter to be roughly the same as last season. Management said it expected fourth-quarter sales to be \u201cflat to slightly negative\u201d compared to the $4.2 billion it notched last year. <\/p>\n

\u201cAs we enter the fourth quarter, we have a balanced view of the holiday season,\u201d Chief Executive Richard Dickson said on Gap\u2019s third-quarter earnings call Thursday. \u201cInventory positions are well-controlled, and our financial position is strong. However, we remain mindful of the uncertain consumer environment.\u201d <\/p>\n

During the call, he also cited areas of improvements for all four of its stores. The Gap, he said, \u201chas been far too quiet in the cultural conversation.\u201d Old Navy needed stronger marketing and product assortment to attract families, he said. The company is trying to turn Banana Republic into a \u201cpremium lifestyle brand\u201d for wealthier customers, and clearing unwanted products from Athleta stores. <\/p>\n

He said that things like the color red were trending, along with sweaters and sequins. And he said that the company would be trying to update its product offerings in something closer to real time<\/p>\n

\u201cI think that we\u2019ve done a good job, and arguably a very good job, with providing what we call \u2018the needs.\u2019 And in that case, it\u2019s providing great basics,\u201d Dickson said. \u201cWhat we have to do a better job of is creating the wants.\u201d<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Shares of Gap Inc. launched higher after hours Thursday after the clothing retailer reported third-quarter results that beat expectations, as easing pressure to cut prices and a rare same-store sales gain from Old Navy offset mixed store performances and lingering holiday-season caution. The company \u2014 which also runs Old Navy, Banana Republic and the women\u2019s […]<\/p>\n","protected":false},"author":1,"featured_media":85607,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-85606","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nGap shares rally as discounted prices ease and Old Navy sees sales gains | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Shares of Gap Inc. launched higher after hours Thursday after the clothing retailer reported third-quarter results that beat expectations, as easing\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=85606\" \/>\n<meta property=\"og:locale\" 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