The American fashion company Gap Inc., known for brands such as Old Navy, Banana Republic and Athleta, is once again posting strong results in the third quarter of 2024. The company increases its net turnover for the fourth consecutive time and also sees further growth in profits. Based on these results, Gap Inc. his expectations for the entire year have increased.
- Gap Inc. reports strong Q3 2024 results with net sales growth and increased profits.
- All brands (Old Navy, Gap, Banana Republic, Athleta) contributed to growth, despite a slight decline in physical store sales.
- Gap Inc. increases its 2024 outlook based on these positive results and expects a strong holiday season.
Gap Inc. achieved a net turnover of 3.8 billion dollars (approximately 3.6 billion euros) in Q3, a growth of 2 percent compared to last year. Comparable sales increased by 1 percent. Online sales are growing by 7 percent and now represent 40 percent of total sales. On the other hand, there was a decline of 2 percent in physical store turnover.
Operating profit amounts to 355 million dollars (approximately 338 million euros), good for an operating profit margin of 9.3 percent. Gap Inc. increases gross margin to 42.7 percent, an improvement of 140 basis points. This profit growth is partly due to better inventory management and more efficient use of resources.
Performance by brand
The brands of Gap Inc. each contributed in their own way to growth in the third quarter of 2024.
Old Navy is Gap Inc.’s largest brand with a net turnover of 2.2 billion dollars (approximately 2.1 billion euros). and shows a turnover increase of 1 percent. The brand benefits from operational efficiencies and brand strengthening strategies.
Gap achieves a turnover of 899 million dollars (approximately 856 million euros), also a growth of 1 percent. Comparable sales even increased by 3 percent, meaning Gap achieved positive results for the fourth consecutive quarter.
Banana Republic achieves a turnover of 469 million dollars (approximately 446 million euros), a growth of 2 percent. Despite a slight decline of 1 percent in comparable sales, the men’s fashion category in particular is performing strongly.
Athleta is growing by 4 percent to a turnover of 290 million dollars (approximately 276 million euros). The brand returns to positive figures, with a 5 percent increase in comparable sales. This success is the result of new product lines and effective marketing campaigns.
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Gap Inc. raises outlook for 2024
CEO Richard Dickson expects further growth from Gap Inc.: “Our performance to date gives us the confidence to raise our full-year expectations for both revenue growth and operating margins.” In addition, Gap, Inc. ends. the quarter with 2.2 billion dollars (approximately 2.1 billion euros) in liquid assets and investments, an increase of 64 percent compared to last year. In addition, the American fashion group’s inventory level fell by 2 percent to 2.33 billion dollars (approximately 2.2 billion euros), which indicates improved operational efficiency.
Dickson expects a strong 2024 holiday season. “The holiday season is off to a strong start. Our performance so far this year gives us the confidence to increase our full-year guidance for revenue, gross margin and operating profit growth,” Dickson added.”
The company is adjusting net sales, gross margin and operating profit margin upward for this year: The company now expects net sales to increase by 1.5 to 2 percent, gross margin to increase by approximately 220 basis points and operating income to will grow by an average to high 60 percent.
Source: fashionunited.nl
