The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
NEW YORK, United States — Gap Inc.'s Old Navy brand is giving investors reason to believe the apparel retailer remains relevant, even if the company's namesake stores are still looking for a boost.
Comparable-store sales increased 9 percent at the discount chain — almost triple the estimate from Consensus Metrix. This caused shares to jump during extended trading. Sales at Banana Republic and the Gap brand, while more moderate, also outpaced expectations.
The apparel retailer has been working to leverage the ongoing success of Old Navy into gains at its other chains, most notably a flagship Gap brand that has stumbled with fashion misses and deep discounts. As mall traffic dwindles, Chief Executive Officer Art Peck is looking to bolster online sales and find more ways to cut costs.
Profit excluding some items was 61 cents a share in the quarter ended Jan. 28, the company said on Thursday. That’s higher than analysts’ average projection of 59 cents. For the coming fiscal year, earnings will be $2.55 to $2.70 a share, outpacing analysts’ average estimate of $2.41.
ADVERTISEMENT
The company forecast comparable sales will be flat or up slightly for the full fiscal year.
The shares rose as much as 12 percent to $35.60 in extended trading in New York. The stock surged 52 percent in 2017, mostly on the success of Old Navy.
Same-store sales at Old Navy had been estimated at 3.4 percent by Consensus Metrix. Banana Republic sales climbed 1 percent by the same measure, versus an estimate for a 2.3 percent decline. Gap sales were flat, while analysts had forecast a decline of 0.5 percent.
By Lindsey Rupp; editors: Nick Turner and Jonathan Roeder.
In 2020, like many companies, the $50 billion yoga apparel brand created a new department to improve internal diversity and inclusion, and to create a more equitable playing field for minorities. In interviews with BoF, 14 current and former employees said things only got worse.
For fashion’s private market investors, deal-making may provide less-than-ideal returns and raise questions about the long-term value creation opportunities across parts of the fashion industry, reports The State of Fashion 2024.
A blockbuster public listing should clear the way for other brands to try their luck. That, plus LVMH results and what else to watch for in the coming week.
L Catterton, the private-equity firm with close ties to LVMH and Bernard Arnault that’s preparing to take Birkenstock public, has become an investment giant in the consumer-goods space, with stakes in companies selling everything from fashion to pet food to tacos.