Please ensure Javascript is enabled for purposes of website accessibility

Gap Reports a $1.2B Loss, but Is Reopening Ahead of Schedule

By Rhian Hunt – Jun 5, 2020 at 11:12AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

E-commerce is booming and stores are rapidly opening their doors to the public.

Casual and lifestyle clothing retailer Gap (GPS -0.95%) reported its first-quarter 2020 results yesterday, unveiling both an operating loss of $1.2 billion and a faster-than-expected reopening. The company already posted a significant loss of $184 million in the last quarter of 2019, but following the impact of COVID-19, the first quarter of this year dwarfed that figure, representing its single biggest drop since its founding a half-century ago.

The company's earnings per share (EPS) and revenue both missed analyst consensus expectations. Its EPS under generally accepted accounting principles (GAAP) fell $2.17 short of expectations, with its $2.51 loss well below the forecast loss of $0.34 per share. Revenue fell more than 43% year over year to $2.11 billion, about $240 million less than anticipated.

An Old Navy employee stands outside a store curbside pickup location.

Image source: Gap.

The report included some good news as well. CEO Sonia Syngal said that the reopening of Gap's various stores as the pandemic eases is going better than expected, remarking, "we have more than 1,500 stores open in North America, ahead of plan, and as stay at home restrictions ease in many markets, we expect to have the vast majority of our North American stores reopened in June."

Syngal also noted Gap's online sales are growing very fast, posting 40% expansion in April and ballooning 100% in May. Earlier, online sales rose by 13% year over year during Q1. Out of Gap's main brands, Athleta showed the strongest online sales growth during the first quarter, with a 49% increase in e-commerce, while Old Navy took second place with a 20% increase in online purchases.

After a brief rise, Gap's stock is down approximately 4% in Friday morning trading.

Rhian Hunt has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The Gap, Inc. Stock Quote
The Gap, Inc.
$8.39 (-0.95%) $0.08

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.