Gap Inc. has exceeded expectations with its fourth-quarter results, despite the global impact of the coronavirus outbreak on markets. The San Francisco-based company reported a 1% increase in total sales, reaching $4.7 billion for the quarter ended February 1. Comparable sales also performed better than expected, falling only by 1% compared to analysts’ predictions of a 3.58% decline.
The success of Gap’s Old Navy label played a significant role in the positive performance, with comparable sales remaining unchanged from the previous year. However, the Gap brand saw a 5% decline in comparable sales, while Banana Republic sales remained flat and Athleta, the company’s activewear brand, experienced a 2% increase.
Despite the positive sales figures, Gap reported a net loss of $184 million for the quarter, in contrast to a net income of $276 million during the same period the previous year. This weaker end to 2019 resulted in a significant decrease in full-year net income, dropping to $351 million from $1 billion in the previous year. Overall sales were down by 1% to $16.4 billion, with comparable sales also declining by 1%.
Gap has provided earnings guidance of $1.80 to $1.92 per share for fiscal year 2020, excluding the potential impact of the coronavirus. However, the company acknowledges the uncertainty surrounding the outbreak and its potential effects on the supply chain and customer demand.
In addition to the earnings release, Gap also announced several executive appointments. Katrina O’Connell, the chief financial officer of Old Navy, has been appointed as the new chief financial officer of Gap Inc., taking over from Teri List-Stoll. Mark Breitbard will lead the company’s specialty brands segment, as well as Gap’s Asia business and franchise category. Nancy Green will assume the role of leading the Old Navy brand, succeeding Sonia Syngal, who was recently promoted to CEO of Gap Inc.
Following these announcements, Gap Inc. shares increased by 4% after the closing bell on Thursday. The company’s ability to navigate the challenges presented by the coronavirus outbreak, along with the strategic executive appointments, will be crucial in managing the uncertain retail landscape in the coming months.