Please ensure Javascript is enabled for purposes of website accessibility

Gap Says Reopened Stores Have Already Recovered 70% of Last Year’s Sales

By Rich Duprey – Jun 5, 2020 at 2:43PM

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

It's a small bit of upbeat news in an otherwise downbeat earnings report.

A silver lining in Gap's (GPS 0.60%) otherwise dour first-quarter earnings report yesterday was that sales at already opened stores have recaptured 70% of last year's numbers.

CFO Katrina O'Connell told analysts, "we're pleased with reopened stores already generating sales at nearly 70% of their performance last year, with particular strength at Old Navy, where our customer base is strong and our store fleet is advantaged given its off-mall positioning."

The only problem is, the retailer's sales last year were a pretty low bar to step over.

Gap employee folding clothes.

Image source: Gap.

Nowhere to go but up

All three of Gap's multi-billion dollar brands -- Banana Republic, Old Navy, and its self-named chain -- failed to record a single instance of same-store sales growth in any quarter of 2019 and its Gap brand has only notched one quarter of positive comps in the last five years.

Obviously the COVID-19 pandemic shutting down all of its retail stores for two months wiped out most revenue and caused Gap to record a $1.2 billion loss for the quarter, so getting any sales going again is important. Yet as a triumph, it's not much to trumpet.

Total sales were down 2% in last year's first quarter as comps fell across the board, and were down by double-digit rates at the Gap brand. Even Old Navy saw a 1% drop from the prior year, so even if Gap gets all three brands back to breakeven it's still a lower threshold it is crossing over.

Retailers will need time to recover from the lockdowns, and Gap's rebounding sales are at least hopeful if it wants to be able to effect the turnaround it is trying to achieve.


Rich Duprey 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.
$8.44 (0.60%) $0.05

*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.