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Gap (GPS) Q3 2021 earnings miss, cuts forecast

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On August 18, 2020, a pedestrian walks past the GAP flagship store in San Francisco.

Justin Sullivan | Getty Images

Gap Inc.The company cut its full-year outlook on Tuesday as the fiscal third quarter results came in short. Covid-related factory shutdowns caused substantial product delays during that quarter.

Sonia Syngal, chief executive of Syngal said that while we had a growing momentum entering the third quarter, severe supply chain headwinds hampered our ability fully to satisfy strong customer demand.”

Gap stated that it had invested in air freight as a way to reduce port congestion during the holiday season. This also brings additional costs that could impact profit margins in the immediate future.

This is how Gap performed in the 3-month period ending Oct. 30, compared to what analysts had predicted using Refinitiv data.

  • Earnings per share: 27 cents adjusted vs. 50 cents expected
  • Revenu: 3.94 Billion vs. 4.44 Billion expected

Gap reported a net loss in the amount of $152million, 40cs per share. This is compared to net income of $95million, 25cs per share one year ago.

According to Refinitiv, the company earned 27 cents per shared, excluding items. This is less than 50 cents analysts were looking for.

From $3.99 billion in 2013, revenue decreased slightly to $3.94 trillion. It was below expectations of $4.44 trillion.

Gap anticipates that full-year revenues will increase 20%. That is less than its previous outlook of a 30% rise. Refinitiv polled its analysts and expected a 28.4% gain year-over–year.

Gap’s adjusted full-year earnings expectations have been reduced to $1.25 to $0.40 per share from $2.10 to 2.25 a shared. Refinitiv reported that Gap had been expected to earn $2.20 per Share by analysts.

Gap reported that the revised outlook accounts for approximately $550 to $650 millions of lost sales due to supply chain restrictions and around $450 million in annual air freight costs.

Gap’s earnings release complete here.

This is a developing story. Stay tuned for new updates.

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