Gap Omnichannel apparel retailer Gap reported a significant drop in revenue and profit margins during the quarter ended September due to shortfalls in inventory caused by disruptions in global supply chains. GPS is facing new travel restrictions due to concerns about the Omicron Coronavirus variant. Will it be able overcome the delivery and production challenges? You can read more. Renowned specialty apparel retailer The Gap, Inc. announced the fiscal third quarter earnings for October 30th, 2021. It was released on November 23rd, 2021. GPS’ net sales fell 1.3% year-over-year to $3.94 billion, despite a 48% increase in online sales from the 2019 levels. From the previous year, operating income was $153 million. This is a 12.6% decrease from the prior period. The company’s net loss came in at $152 million, reflecting a substantial decline from the year-ago net profit of $95 million. Analyst estimates were 46% off when the loss per share came out to $0.40. Following the third-quarter earnings release, the stock declined 26.3% to close Friday’s trading session at $17.33.

GPS has blamed supply chain problems due to port congestions and factory closings for its disappointing performance over the past quarter. The significant delays in deliveries affected the company’s inventory margins as well as sales, as it was not able to meet the strong market demand.

GPS’ management stated that it has been working to increase air freight and port diversification to meet the demand this holiday season. However, with the rising concerns surrounding the omicron coronavirus variant leading to the reimposition of travel restrictions worldwide, GPS’ inventory shortfall will likely continue throughout the fiscal fourth quarter (ending January 2022).

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