For the third quarter Gap’s net sales were down one per cent. Online sales for the quarter increased 48 per cent. Global supply chain disruption, including Covid-related factory closures and continued port congestion, caused significant product delays in the third quarter. Meaningfully reduced inventory positions throughout the quarter negatively impacted sales.
While Gap entered the third quarter with growing momentum, acute supply chain headwinds affected its ability to fully meet strong customer demand. Still, it made an intentional investment in building enduring customer loyalty with accelerated use of air freight to serve them this holiday, choosing long-term growth opportunity over near term impact to profitability. The aim is to restructure and digitize the business with an eye on creating a better future, faster.
The company remains focused on digital dominance through investing in its e-commerce platform, strategically closing unprofitable stores and partnering to amplify in international markets. Gap has entered into partnership agreements in the UK, Ireland, France, and Italy, which are expected to improve the profitability of its European business. The launch of a second Gap Home collection at Walmart has expanded its assortment to include furniture and rugs.
Gap is 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 US.