Gap Inc. Reports Fourth Quarter And Fiscal 2022 Results

Gap Inc. (NYSE: GPS), a portfolio of purpose-led, billion-dollar lifestyle brands including Old Navy, Gap, Banana Republic, and Athleta, and the largest specialty apparel company in the U.S., today reported financial results for its fourth quarter and fiscal year ended January 28, 2023. The company is also announcing several changes to its executive leadership team.

“To enter fiscal 2023 in a more competitive position, we took quick and effective action to clear excess inventory, improve assortment balance, particularly at Old Navy, and to meaningfully optimize our cost structure, resulting in $550 million in annualized savings identified to date,” said Bob Martin, Gap Inc. Executive Chairman and Interim CEO. “The Board is getting close to choosing the next CEO for Gap Inc. As a result of the work we have underway to build a stronger foundation and restore the company’s creative muscle, we are optimistic that this will provide our new leader with a quicker ramp in driving consistent, profitable growth over the long term.”

Fourth Quarter Fiscal 2022 – Financial Results:
*Net sales of $4.24 billion, down 6% compared to last year, inclusive of an estimated 1-point foreign exchange headwind. Net sales were in-line with the company’s expectations for mid-single digit declines in the quarter.
-Comparable sales down 5% year-over-year.
-Store sales decreased 3% compared to last year.
-Online sales decreased 10% compared to last year and represented 41% of total net sales.
*Gross margin was 33.6%, deleveraging 10 basis points versus last year.
-Merchandise margin increased 20 basis points versus last year as higher discounting and inflationary commodity price increases were offset by lower air freight expense.
-Rent, occupancy, and depreciation (ROD) deleveraged 30 basis points versus last year primarily due to lower online sales in the quarter.
*Operating loss was $30 million; operating margin of negative 0.7%.
*The effective tax rate was negative 535%.
*Net loss of $273 million; diluted loss per share of $0.75.
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