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Gap (GPS) Q3 2021 earnings miss, cuts forecast

A Gap retailer in New York, August 2, 2020.

Scott Mlyn | CNBC

Gap Inc. shares tumbled Tuesday after the company slashed its full-year outlook, with fiscal third-quarter outcomes falling brief as Covid-related manufacturing facility closures led to important product delays within the quarter.

Its stock was just lately down 15% in prolonged buying and selling on the information, having risen about 16% year up to now.

“While we entered the third quarter with growing momentum, acute supply chain headwinds affected our ability to fully meet strong customer demand,” stated Chief Executive Sonia Syngal in a press launch.

Gap stated it invested in air freight to assist mitigate among the port congestion challenges over the vacations. But that additionally means added bills that may weigh on earnings within the close to time period.

Here’s how Gap did within the three-month interval ended Oct. 30 in contrast with what analysts had been anticipating, utilizing Refinitiv knowledge:

  • Earnings per share: 27 cents adjusted vs. 50 cents anticipated
  • Revenue: $3.94 billion vs. $4.44 billion anticipated

Gap stated it swung to a web lack of $152 million, or 40 cents per share, from web earnings of $95 million, or 25 cents a share, a year earlier.

Excluding gadgets, it earned 27 cents per share, wanting the 50 cents that analysts had been searching for, in response to Refinitiv.

Revenue fell barely to $3.94 billion from $3.99 billion a year earlier. That missed expectations for $4.44 billion.

Comparable gross sales at Old Navy fell 9% year over year and had been up 6% in contrast with 2019. The company stated this banner was disproportionately impacted by provide chain delays, notably its girls’s assortment.

At its namesake Gap model, comparable gross sales rose 7% from a year earlier and had been up 3% versus 2019.

At Banana Republic, which focuses extra on promoting work put on for girls, comparable gross sales rose 28% from year-ago ranges and fell 10% on a two-year foundation.

Comparable gross sales at Athleta, Gap’s rival to Lululemon and Nike for girls, elevated 2% from a year earlier and rallied 41% versus 2019.

Gap now expects full-year income to be up about 20%, which is much less that its prior outlook of a couple of 30% enhance. Analysts polled by Refinitiv had been searching for a 28.4% year-over-year achieve.

Gap’s expectations for adjusted full-year earnings have been lowered to a variety of $1.25 to $1.40 per share, from a previous vary of $2.10 to $2.25 a share. Analysts had anticipated Gap to earn $2.20 per share, Refinitiv stated.

Gap stated its revised outlook takes under consideration roughly $550 million to $650 million of lost gross sales from provide chain constraints and about $450 million in air freight prices for the year.

Find the complete earnings launch from Gap here.

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