US-based clothing and accessory retailer Gap has registered $3.5bn in net sales for the first quarter (Q1) of the fiscal year 2022 (FY22), down by 13% from the same period of 2021.
The retailer saw its net sales affected by various factors, including store closures and the change in the company’s European business to a partnership model.
Sales for the Old Navy and Gap brands dropped by 19% and 11% respectively, while Banana Republic and Athleta posted respective net sales increases of 24% and 4%.
For the three months to 30 April, Gap’s online sales dropped by 17% from last year and accounted for 39% of its total net sales.
Gap saw its store sales decline by 10% in Q1 against the same period a year earlier, while its gross margin dropped by 930 basis points to 31.5% year-over-year.
The company’s operating loss for the quarter was $197m and its net loss was $162m, or $0.44 for each diluted share.
Gap CEO Sonia Syngal said: “While we are disappointed to deliver results below expectations, we are confident in our ability to navigate the headwinds and re-stabilise the Old Navy business in order to deliver continued progress on our long-term strategy.
“We remain anchored by our belief in our iconic purpose-led brands – Old Navy, Gap, Banana Republic, and Athleta – and are focused on making continued progress against our Power Plan strategy and getting back on track toward delivering growth, margin expansion, and value for our shareholders over the long term.”
For the full year, Gap expects its revenue to decrease in the low to mid-single digit range compared with last year and has forecast a gross margin of between 36.5% and 37.5%.
The retailer owns several major brands, including Old Navy, Gap, Banana Republic and Athleta. It operates 3,414 store locations across more than 40 countries.