E-commerce was the only bright spot for Gap in Q3
November 18, 2011 11:44 AM
Total sales and comparable-store sales fell for Gap Inc. in the third quarter. But there was a bright spot: e-commerce.
For the third quarter ended Oct. 29, Gap, No. 24 in the Internet Retailer Top 500 Guide, reported:
- Web sales increased year over year 21.1% to $414 million from $342 million.
- Total sales declined 1.6% to $3.59 billion from $3.65 billion.
- Comparable-store sales decreased 5%.
- Net income declined 36.3% to $193 million from $303 million.
Internet Retailer calculates the web accounted for 11.5% of total sales in the third quarter compared with 9.4% in the prior year. “Our e-commerce business was up 21% in the third quarter,” CEO Glenn Murphy told analysts on the company’s third quarter earnings call. “We've made great investments and good decisions on mobile technology. We've made very good decisions when it comes to online media investments we're making in marketing. Those decisions have really helped propel a plus 21 performance.”
For the first three quarters:
- Internet Retailer calculates that e-commerce sales increased 19.6% to $1.07 billion from $895 million. That figure is based on Gap’s earlier e-commerce sales listed in its earnings releases and its quarterly financials filed with the U.S. Securities & Exchange Commission.
- Total sales declined 0.4% to $10.26 billion from $10.30 billion.
- Net income declined 26.7% to $615 million from $839 million.
Internet Retailer calculates the web accounted for 10.4% of total sales in the first three quarters compared with 8.7% in the prior year.
Gap, which increasingly is counting on international expansion and more global e-commerce to fuel its future growth, says it is taking steps to deliver a more productive year-end quarter, especially with better marketing and product assortment for its Old Navy brand.
“Across our brands, we’re intensely focused on improving our current sales trend, including making necessary product and marketing adjustments, with a view toward building momentum as we head into 2012,” says Murphy. “We’re ready to compete aggressively this holiday.”