Gap, Inc. (GPS) Nov. Comps Fell More than Expected

Gap Inc. (NYSE: GPS) reported that net sales for the four-week period ended November 26, 2016 were $1.53 billion compared with net sales of $1.57 billion for the four-week period ended November 28, 2015.

“While November traffic trends remained challenging, we are encouraged that performance improved in the back half of the month and we remain focused on executing our holiday plans,” said Sabrina Simmons, chief financial officer, Gap Inc.

November Comparable Sales Results

Gap Inc.’s comparable sales for November 2016 were down 1 percent versus an 8 percent decrease last year. (NOTE: The Street was looking for a drop of 0.4 percent.) The company estimated that the fire, which occurred in a building on its Fishkill, New York distribution center campus, negatively impacted Gap Inc.’s November 2016 comparable sales by approximately 3 percentage points. Additionally, the company noted that the majority of the fire-related negative impact to comparable sales during the fourth quarter of fiscal year 2016 occurred in November.

Comparable sales by global brand for November 2016 were as follows:

• Gap Global: negative 3 percent, including an estimated negative impact from the Fishkill distribution center fire of approximately 4 percentage points, versus negative 4 percent last year
• Banana Republic Global: positive 5 percent, including an estimated negative impact from the Fishkill distribution center fire of approximately 3 percentage points, versus negative 19 percent last year
• Old Navy Global: negative 2 percent, including an estimated negative impact from the Fishkill distribution center fire of approximately 1 percentage point, versus negative 9 percent last year

Gap Inc. noted that the estimated impact to comparable sales from the Fishkill distribution center fire was calculated by applying the forecasted merchandise margin rate before the fire occurred to the units that the company believed would have been sold in November.

Additional insight into Gap Inc.’s sales performance is available by calling 1-800-GAP-NEWS (1-800-427-6397). International callers may call 706-902-4949. The recording will be available at approximately 1:15 p.m. Pacific Time on December 1, 2016 and available for replay until 1:15 p.m. Pacific Time on December 9, 2016.

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