Gap Inc. Reports Fourth Quarter and Fiscal 2023 Results

“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 Chief Executive Officer, Richard Dickson. “The financial and operational rigor we have worked to develop, and will continue to pursue, is enabling us to focus on reinvigorating our brands with the goal of generating profitable growth and value for shareholders. While there is a lot of work to do, I am inspired by the team’s commitment and energized by the opportunities ahead.”

The company noted that fiscal year 2023 had 53 weeks versus 52 weeks in fiscal year 2022. As a result, the company’s results for the fourth quarter and the fiscal year include the additional week, while comparable sales calculations exclude the additional week.

Fourth Quarter Fiscal 2023 – Financial Results:
*Net sales of $4.3 billion were up 1% compared to last year, inclusive of an estimated 2 percentage points of negative impact from the sale of Gap China. The addition of the 53rd week contributed approximately 4 percentage points of growth to the fourth quarter.
-Comparable sales were flat year-over-year.
-Store sales increased 4% compared to last year.
-Online sales decreased 2% compared to last year and represented 40% of total net sales.
*Gross margin was 38.9%, an increase of 530 basis points versus last year.
-Merchandise margin increased 500 basis points versus last year primarily driven by lower commodity costs and improved promotional activity during the quarter.
-Rent, occupancy, and depreciation (ROD) as a percent of sales leveraged 30 basis points versus last year.
*Net income of $185 million; diluted earnings per share of $0.49.
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