Old Navy the Sole Bright Spot in Gap's Financial Performance

— October 11, 2016

Gap Inc. reported that net sales for the five-week period ended Oct. 1, 2016 decreased 2 percent to $1.43 billion compared with net sales of $1.46 billion for the five-week period ended October 3, 2015.

"While we remain focused on performance across the portfolio, we are pleased to see a strong customer response to Old Navy's product assortment, which continues to drive positive momentum at our largest brand," said Sabrina Simmons, CFO, Gap Inc.

September sales results
Gap Inc.'s comparable sales for September 2016 were down 3 percent versus a 1 percent decrease last year. The company estimated that the fire which occurred in a building on its Fishkill, New York distribution center campus negatively impacted Gap Inc.'s September 2016 comparable sales by approximately 3 percentage points.

The company noted that September merchandise margin rates actualized significantly higher than previously forecasted, which more than offset the estimated earnings impact from lost sales and increased logistics costs during the month that resulted from the Fishkill distribution center fire.

Comparable sales by global brand for September 2016 were as follows:

  • Gap global: negative 10 percent, including an estimated negative impact from the Fishkill distribution center fire of approximately 5 percentage points, versus flat last year
  • Banana Republic global: negative 9 percent, including an estimated negative impact from the Fishkill distribution center fire of approximately 3 percentage points, versus negative 10 percent last year
  • Old Navy global: positive 4 percent, including an estimated negative impact from the Fishkill distribution center fire of approximately 2 percentage points, versus positive 4 percent last year
The company also noted that as a result of the Fishkill distribution center fire, it expects a negative impact of approximately 3 percentage points to Gap Inc.'s October 2016 comparable sales and a negative impact to comparable sales results in the fourth quarter of fiscal year 2016.

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