Gap reports September comparable sales down 3%, sees impact to October sales
Gap reported that net sales for the five-week period ended October 1 decreased 2% to $1.43B compared with net sales of $1.46B for the five-week period ended October 3, 2015. Gap Inc.'s comparable sales for September were down 3% versus a 1% decrease last year. The company estimated that the fire which occurred in a building on its Fishkill, New York distribution center campus negatively impacted Gap Inc.'s September comparable sales by approximately 3% points. The company noted that September merchandise margin rates actualized significantly higher than previously forecasted, which more than offset the estimated earnings impact from lost sales and increased logistics costs during the month that resulted from the Fishkill distribution center fire. Comparable sales by global brand for September were as follows: Gap Global: negative 10%, including an estimated negative impact from the Fishkill distribution center fire of approximately 5 percentage points, versus flat last year. Banana Republic Global: negative 9%, including an estimated negative impact from the Fishkill distribution center fire of approximately 3 percentage points, versus negative 10% last year. Old Navy Global: positive 4%, including an estimated negative impact from the Fishkill distribution center fire of approximately 2 percentage points, versus positive 4% last year. The company also noted that as a result of the Fishkill distribution center fire, it expects a negative impact of approximately 3 percentage points to Gap Inc.'s October comparable sales and a negative impact to comparable sales results in Q4. "While we remain focused on performance across the portfolio, we are pleased to see a strong customer response to Old Navy's product assortment, which continues to drive positive momentum at our largest brand," said CFO Sabrina Simmons.