Immediate action was announced by Bob Martin, Executive chairman and interim CEO of the company.
Of course, there are several reasons for these weak results – some reflecting widespread economic pressures while others specifically tied to the company. In general, the demand softness across lower income groups dampened sales – especially for Old Navy. On top of that, the shutdown of Veezy Gap negatively impacted growth by about 2 percent and the Banana Republic weakness was, according to the company, driven by weak sales in outerwear and sweaters.
Collectively, these issues combined to dampen sales; fourth quarter reported net sales of $4.24 billion, down -6% to from last year. Comparable sales were down -5% compared to last year. Store sales decreased by -3%. In contrast, the report says that on-line sales decreased by -10% but still represented 41% of total net sales
For the full year, the company reported net sales of $15.6 billion or a drop of-6%. Comparable sales were down -7%. On-line orders decreased by -7%. The company had a reported operating loss of $69 million. The adjusted net loss was $145 million, excluding the impairment charges related to inventory, costs related to the Old Navy Mexico transition, and gain on the sale of a distribution center in the U.K. At the end of the day, Gap reported an adjusted diluted loss per share of ———$0.40.
The holiday selling season was difficult for every retailer. On top of inflationary pressures, the weather was too warm during most of December, with only occasional cold blasts. All retailers had a difficult time, but Gap showed its comparative weakness and desperate need for strong merchant leadership, it needs an individual with vision and creative insight.
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