Market Updates
Gap Inc Focuses On Trimming Inventories, Withdraws 2022 Guidance
Scott Peters
26 Aug, 2022
New York City
Gap Inc, after rising as much as 6%, declined 1.20% to 9.84 after the apparel retailer reported rising sales at its Banana Republic chain.
Second quarter revenues fell 8% to $3.86 billion and comparable sales across all divisions declined 10%.
Merchandise margin declined 850 basis points on inventories impairment charges and incremental air freight costs.
Gap Inc swung to a net loss of $49 million from a profit of $258 million and swung to a diluted loss per share of 13 cents from a diluted profit of 67 cents a year ago.
Gap also withdrew its 2022 outlook citing macroeconomic challenges, company management changed and CEO transition.
The retailer also added that growth in inventories in the third quarter "to moderate substantially" and the company is targeting negative inventories by the end of last year "as a result of its inventory actions, reduction of receipts, and anniversary of higher in-transit levels last year."
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