Athleta parent Gap, Inc., had an issue reporting its second-quarter earnings on Thursday, August 29. The company inadvertently posted results for the three-month period ended August 3 in the morning of the prescribed reporting day instead of the end of the day After Market Close.
GAP shares were up 3 percent early after being halted earlier in the day following a Bloomberg News report that said the apparel retailer’s earnings press release and presentation appeared on its website in the morning.
The company told Reuters that its Q2 2024 earnings results were “briefly and accidentally” posted on its website Thursday morning, August 29, due to an “administrative error.”
Athleta’s second quarter net sales amounted to $338 million, down 1 percent compared to last year’s Q2 period. The company can track the decline in regional performance in Canada, which declined in strong double digits year-over-year, while U.S. sales were flat for the period.
Athleta posted sales of $327 million in the U.S. in Q2, flat to the 2023 Q2 period. Canada sales slipped to $10 million (U.S.) in the second quarter, from $13 million in Q2 2023. Other regions were said to be flat for the period.
Overall, comparable store sales were down 4 percent year-over-year, cycling the 7 percent decline in the year-ago Q2 period. This year’s second-quarter comp decline represented a sharp reversal from the 5 percent increase posted in the first quarter.
Athleta went from the best comp performance of the Gap Inc. nameplates in Q1 to the worst performer for the second quarter, but Gap Inc. management expected as much, noting on its first quarter conference call that the company anticipated a challenging comparison for Athleta in the first half of this year as the retail brand laps elevated discounting from 2023.
Year-to-date comps were flat for Athleta.
Still, this year’s Q2 comp sales result was the best second-quarter comp result since 2021, when comps jumped 13 percent. Second-quarter comps have been down in the high-single-digits for the last two years.
For the first three years that Gap Inc. owned the Athleta business, Q2 comps were up in the mid- to high-teens.
In the second quarter, Athleta was expected to lap the balance of last year’s heavy discounting, and, as a result, the company planned for second-quarter net sales to be down in mid-single-digits versus the prior-year Q2 period as the brand navigates “this unique period.”
Management said at the time of the Q1 earnings release that the company expected the promotional volume comparisons for Athleta to improve by the second half of 2024, with Q2 having the most challenging comparisons for the brand.
The company said Thursday that it expects Athleta to return to positive comparable sales growth for the remainder of 2024.
Athleta opened two stores and closed one store in the first half of 2024, ending the half with 271 stores in North America on August 3, amounting to 1.1 million square feet of retail space at the end of the period.
Editor’s note: The Gap Inc. earnings conference call will occur as planned at 5 p.m. EST on Thursday, August 29. SGB Media will update this article overnight to reflect any new commentary.
Image courtesy Athleta/Gap Inc.
