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Gap Expects Sale Growth In 2021 Driven By Athleta Brand And Covid-19 Vaccine Roll-Out


03/05/2021


Gap Expects Sale Growth In 2021 Driven By Athleta Brand And Covid-19 Vaccine Roll-Out
The apparel retailer Gap Inc expects demand and sales of products under its Athleta brand to double within the next two years, and along with the roll out of Covid-19 vaccines will bring in more customers to its stores which prompted the company to forecast a return to sales growth this year.
 
Following the company beating expectations for its fourth quarter earnings, the stocks of the San Francisco-based company rose 4.4 per cent in extended trading on Thursday.
 
The joggers, tees and shirts form the company’s affordable brand Old Navy and those from its Athleta had turned out to be stay-at-home favourites during the Covid-19 pandemic with consumers having to stay back home and work and attend classes online.
 
During the fourth quarter of last year, the company reported a 29 per cent rise in the sales of Athleta which touched more than a billion dollars and the company’s Chief Executive Officer Sonia Syngal told analysts in a post-earnings conference call that the company expected that sales to touch $2 billion by 2023.
 
“We have never been more confident in Athleta’s path forward,” Syngal added.
 
In the fiscal 2021, the company now plans to open between 30 and 40 Old Navy stores and 20 to 30 Athleta stores while closing down about 100 Gap and Banana Republic stores.
 
Even before the pandemic hit the world, the stores of its namesake brand and Banana Republic were being closed down by Gap because those brands were struggling to attract customers. 
 
With customers shifting more to online purchasing, an investment of $140 million to prop up Gap’s network of distribution centers was made by the company last month.
 
During the latest completed quarter, the company reported a 49 per cent rise in its online sales.
 
The company now expects to see sales growth in the mid- to high-teens for the entire of the fiscal 2021-22 and Gap forecast earnings for the fiscal year to be in the range of $1.20 per share to $1.35 per share.
In the fourth quarter, Gap earned 28 cents per share on a per share basis which was a higher by 10 cents then expected by market analysts according to IBES data from Refinitiv.
 
(Source:www.buasinessoffashion.com)