Gap Inc. (San Francisco) recently reported its earnings report for the second quarter, revealing a net sales of $881 million for Gap which was down 10 percent compared to 2021, according to a company press release. For Gap Inc. as a whole — including Old Navy, Gap, Banana Republic and Athleta — net sales were $3.86 billion, down 8 percent compared to last year.
Comparable sales were also down 10 percent year over year, with a reported net loss of $49 million. Gap’s Interim CEO Bob Martin cited elevated inventory, inventory impairment and margins, pressured by unsettled market conditions, for the fall in earnings.
Merchandise margins were impacted by air freight costs, inflationary price increases and higher discounting — primarily at Old Navy, which has been struggling with aged inventory and selection problems. The decrease in sales also came from store closures.
“Our recent execution challenges combined with the uncertain macro trends requires us to manage the levers in our control and take the actions necessary to drive improvement across our entire business,” says Martin.
Overall declines were partially offset by successful strategic discounting at Banana Republic, which stood out among the chains with a 9 percent increase in net sales to $539 million.