US-based apparel retailer Gap has reduced its full-year financial outlook for this fiscal year (FY21) as supply chain disruption continued to impact both its comparable and net sales.
During the three months to 30 October, the retailer’s comparable sales grew by 5% from the same period of 2019.
Gap’s net sales for the quarter were $3.9bn, down by 1% from two years prior. It reported a diluted loss of $0.40 for each share.
The company’s digital sales rose by 48% compared to the third quarter of 2019 and represented 38% of its total sales.
Gap’s gross margin for the quarter was 42.1% on a reported basis, while its operating margin was 3.9%.
The retailer ended the quarter with 3,459 store locations in more than 40 countries.
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Gap CEO Sonia Syngal said: “While we entered the third quarter with growing momentum, acute supply chain headwinds affected our ability to fully meet strong customer demand.
“Still, we made an intentional investment in building enduring customer loyalty with accelerated use of air freight to serve them this holiday, choosing long-term growth opportunity over near-term impact to profitability.
“Current pressures have not distracted us from what matters: growing our billion-dollar brands, delighting our more than 64 million customers with product and experiences that drive lifetime value and restructuring and digitising our business with an eye on creating a better future faster.”
For the full year, Gap expects its reported full-year diluted earnings for each share to be between $0.45 and $0.60.
It also expects its full-year revenue to increase by around 20% from the same period of last year.
Gap’s brand portfolio currently includes Old Navy, Gap, Banana Republic and Athleta among others.
Last month, the company acquired artificial intelligence (AI) start-up Context-Based 4 Casting (CB4) for an undisclosed sum.
CB4 uses AI and machine learning tools to make predictive analytics and demand sensing to help retailers improve sales and streamline customer experiences.