Gap Inc. Sees Signs of Recovery with Profitable Q1
Gap Inc. displayed signs of financial recovery, reporting a profitable first quarter for 2024. This is an upturn compared to last year’s loss, with the company noting sales gains for all four of its brands: Old Navy, Gap, Banana Republic, and Athleta.
For the quarter concluding on May 4, the net income was reported as $158 million. This is a considerable jump when compared to the net loss of $18 million that was reported for the same period in the past year. Moreover, the company reported an operating income of $205 million, overturning the operating loss of $10 million from last year.
The company’s net sales were $3.4 billion, marking a 3 percent increase from the previous year. Comparable sales showed a similar growth pattern, rising by 3 percent as well.
Gap predicts an increase in sales for fiscal 2024, despite an uncertain consumer and macro environment. Last year, Gap Inc. generated $14.9 billion in revenues. The company also anticipates its operational income to increase in the mid-40 percent range, projecting at least 150 basis points increase in gross margin.
First-quarter net revenues for the brand Old Navy reached $1.9 billion, representing a 5 percent increase compared to last year. Similarly, Gap, Banana Republic, and Athleta all reported increased sales and comparable gains as well.
At the end of the quarter, the company boasted 3,571 stores in more than 40 countries, with 2,554 company-operated stores. Online sales saw a 5 percent increase compared to last year, representing 38 percent of total net sales. The gross margin of 41.2 percent marks an increase of 410 basis points over last year’s reported gross margin.