Gap reports positive fourth quarter results

Gap’s fourth quarter net sales of 4.3 billion dollars were up 1 percent, with comparable sales flat year-over-year.

Net sales for the full year of 14.9 billion dollars were down 5 percent, while comparable sales down 2 percent.

For the fiscal year 2024, the company forecasts net sales to remain flat, gross margin expansion of 50 basis points, low-to-mid teens growth in operating income. First quarter sales are also expected to remain flat with gross margin expansion of 100 basis points.

"The fourth quarter exceeded expectations on several key metrics along with market share gains, reflecting improved trends at Old Navy and Gap and strong continued progress on margins and cash flow," said Gap Inc. president and CEO, Richard Dickson in a statement.

Gap posts positive Q4

Fourth quarter store sales increased 4 percent, while online sales decreased 2 percent and represented 40 percent of total net sales.

Full year store sales decreased 3 percent compared to last year. The company ended the year with 3,560 store locations in over 40 countries, of which 2,562 were company operated. Online sales decreased 7 percent and represented 37 percent of total net sales.

Gross margin was 38.9 percent, an increase of 530 basis points versus last year. Operating income for the quarter was 214 million dollars and operating margin was 5 percent, while net income was 185 million dollars with diluted earnings per share of 49 cents.

Gross margin for the year of 38.8 percent, expanded 450 basis points, reported operating income was 560 million dollars; and reported operating margin of 3.8 percent. Adjusted operating income was 606 million dollars with adjusted operating margin of 4.1 percent.

Reported net income was 502 million dollars and reported diluted earnings per share were 1.34 dollars. Adjusted net income was 536 million dollars, while adjusted diluted earnings per share were 1.43 dollars.

Performance of brands under Gap Inc portfolio

Fourth quarter net sales at Old Navy of 2.29 billion dollars were up 6 percent and comparable sales were up 2 percent. Full year net sales of 8.2 billion dollars remained flat with comparable sales down 1 percent.

Gap brand fourth quarter net sales of 1.01 billion dollars were down 5 percent but comparable sales were up 4 percent driven by continued strength in women's, which gained market share for the fifth quarter in a row. Full year net sales of 3.3 billion dollars were down 11 percent but comparable sales were up 1 percent. Banana Republic fourth quarter net sales of 567 million dollars were down 2 percent compared to last year. Comparable sales were down 4 percent. Full year net sales of 1.9 billion dollars were down 8 percent and comparable sales were down 7 percent.

Fourth quarter net sales at Athleta of 419 million dollars were down 4 percent and comparable sales were down 10 percent. Full year net sales of 1.4 billion dollars were down 8 percent and comparable sales were down 12 percent.