Gap’s web sales grow 2.3% in Q3 as total sales fall
November 20, 2015 10:43 AM
Old Navy and e-commerce provided some good news in a tough fiscal third quarter for Gap Inc.
The apparel retailer reported Thursday that online sales increased 2.3% to $635 million in the quarter ended Oct. 31, up from $621 million last year. However, net sales decreased 3% and comparable-store sales were down 2%.
“With a challenging third quarter behind us, we are sharply focused on holiday execution across all channels,” Gap CEO Art Peck said in a statement accompanying the earnings release. “We are driving forward on our key strategies designed to fuel future growth.” Of Gap’s major brands, only Old Navy registered comparable-store growth, increasing 4% over the same quarter last year.
While the retailer’s net sales are down 2.7% for the year, web sales are up nearly 1% to $1.727 million from $1.711 million.
Asked about e-commerce on a conference call with analysts, Peck said Thursday that Gap’s greatest online opportunity is in serving shoppers on mobile devices. He says the retailer already has reworked its e-commerce sites using responsive design techniques, so that the sites adapt to the size of the screen the consumer is viewing. It also now uses more images in place of text and has improved mobile checkout and promotions.
“We’re making sure the experience is emotional, immersive and aspirational on a mobile device, but also transactionally efficient,” he said. “That’s probably the biggest opportunity we’ve got right now.”
Gap is No. 18 in the Internet Retailer 2015 Top 500.
For the fiscal third quarter ended Oct. 31, Gap reported:
- Net sales of $3.857 billion, down 2.9% from $3.972 billion during the same period last year.
- Worldwide comparable-store sales for Gap were down 4% and for Banana Republic 12%, while Old Navy was up 4%.
- Net income of $248 million, a decline of 29.3% from $351 million last year.
For the quarter, online sales accounted for 16.5% of revenue versus 15.6% last year.
For the first nine months of fiscal 2015, Gap reported:
- Net sales of $11.412 million versus $11.727 million during the same three quarters of the prior fiscal year, a decline of 2.7%.
- Net income of $706 million from $943 million, a decrease of 25.1%.
The web has accounted for 15.1% of sales year to date, versus 14.6% last year.