40% of Gap’s Revenue Comes from Online
Gap Inc. announced after the U.S. stock market on Tuesday (November 24) the financial report for the third quarter of fiscal year 2020 (as of October 31, 2020): revenue was reported at 3.994 billion US dollars, slightly below one At 3.998 billion US dollars a year ago, online sales grew 61%, driving same-store sales up 5%, and diluted earnings per share decreased 32.4% to 0.25 US dollars.
IBES analyst forecast published by Refinitiv shows that the market expects Gap’s third-quarter diluted earnings per share to reach $0.32 and same-store sales to decline 0.62%.
Sonia Syngal, CEO of Gap Inc. pointed out that as much as 40% of the third quarter’s revenue came from online.
Gap’s operating expenses in the third quarter increased by 8% year-on-year to US$1.445 billion; operating expense ratio reported 36.2%, an increase of 270 basis points from the same period last year, of which 175 basis points were derived from higher cross-brand marketing investments.
Gap Inc. estimates that this quarter’s revenue will be the same as or slightly higher than the same period last year, and the gross profit margin is expected to be the same as last year, reflecting that the cost-saving benefits of closing stores are largely offset by higher transportation costs.
Gap estimates that this quarter’s operating expense ratio will be between 33-34%, which mainly reflects the company’s continued investment in brand marketing (to increase market share) and continued investment in in-store health and safety measures for customers and employees cost.
Gap pointed out that despite the recent rapid increase in new confirmed cases of the novel coronavirus (COVID-19), which may affect in-store shopping, the rapid increase in the proportion of online sales has kept the company optimistic about its fourth quarter results.
Gap said last month that the proportion of online sales hopes to rise to 50% by the end of 2023.
The Harvest XQ Global Winner Quotation System shows that Gap Inc. (GPS.US) rose 3.11% on Tuesday to close at US$26.87, a record high since March 5, 2019.
Gap Inc. plunged 11.03% to 23.88 US dollars after the market on Tuesday.
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40% of Gap's Revenue Comes from Online - Gap,Revenue/10