A silver lining in Gap's (NYSE:GPS) 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.
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.