Dow Today – Gap boosts sales forecast on Athleta, Old Navy demand boom
Aug 26 (Reuters) – Gap Inc on Thursday raised its full-year net sales forecast for the second time, betting on hot demand for its Old Navy and Athleta clothing brands as socializing makes a comeback with easing pandemic curbs.
San Francisco-based Gap also lifted its annual profit estimate, with both forecasts coming in above Wall Street expectations as the return to relative normalcy powers sales across the apparel industry – from department stores Macy’s and Kohl’s to discounters like T.J. Maxx.
Even clothing chains that had stocked up generously are running out of tops and dresses as schools and colleges reopen, and people celebrate weddings, graduations and group events again, analysts said.
Gap is also benefiting from celebrity tie-ups with rapper Kanye West, Olympian Simon Biles and others, while sharpening its focus on inclusivity.
It expects fiscal 2021 net sales growth of about 30% versus a prior forecast in the low-to-mid 20% range. Analysts estimated a 24.3% growth, according to IBES data from Refinitiv.
The company forecast annual profit, excluding some charges, between $2.10 and $2.25 per share from $1.60 to $1.75 earlier. Analysts expected a profit of $1.80 per share. (Reporting by Praveen Paramasivam in Bengaluru; Editing by Devika Syamnath)