US clothing retailer Gap’s sales down 13% to $3.5 billion in the first quarter of FY22

U.S. clothing retailer Gap’s net sales in the first quarter of 2022 were $3.5 billion, down 13% from a year ago. Net sales growth was negatively impacted by approximately 5 percentage points related to the reversal of stimulus benefits last year and approximately 3 percentage points by divestitures, store closures and the transition of the European business from the company.

In the first quarter, online sales were down 17% from a year ago and accounted for 39% of total net sales. Store sales were down 10% from a year ago. The company ended the quarter with 3,414 stores in more than 40 countries, including 2,825 company-operated, the company said in a press release.

“Our first quarter results and updated outlook for fiscal 2022 primarily reflect industry-wide headwinds as well as Old Navy challenges impacting our near-term performance. Although we are disappointed to deliver results below expectations, we are confident in our ability to navigate headwinds and re-stabilize the Old Navy business to continue progress on our long-term strategy,” said Sonia Syngal, CEO, Gap Inc.. “We believe we can weather this period of acute disruption and build an even more resilient and agile business. We remain rooted in our belief in our iconic purpose-driven brands – Old Navy, Gap, Banana Republic and Athleta – and we We are focused on continuing to progress against our Power Plan strategy and getting back on track to deliver growth, margin expansion and shareholder value over the long term.

Gap’s first-quarter 2022 net sales were $3.5 billion, down 13% from a year ago. Net sales growth was negatively impacted by approximately 5 percentage points related to the reversal of stimulus benefits last year and approximately 3 percentage points by divestitures, store closures and the transition of the European business from the company.

“We are revising our outlook for fiscal 2022 to reflect the impact of certain factors impacting our near-term performance, including execution challenges at Old Navy, an uncertain macro consumer environment, related headwinds to inflation and a slowdown in China that affects Gap Brand,” said Katrina O’Connell, Executive Vice President and Chief Financial Officer, Gap Inc. “We expect our performance to improve slightly in the second half of the year and accelerate as we enter fiscal 2023. We believe our long-term strategy is the right one and we are taking steps to position our brands, our platform and our collaborators in order to capitalize on the important opportunities to come.

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Anne G. Cash