Athleta’s net sales were up 35 percent in the second quarter versus 2019, according to its parent, Gap Inc. Comparable sales at Athleta grew 13 percent year-over-year and 27 percent versus 2019.

In a statement, Gap Inc. said Performance Lifestyle products performed well at Athleta as customers went back to work and engaged in more activities while still valuing comfort. 

Inclusive sizing, which launched last quarter, continues to perform well, building customer loyalty. Partnerships with world-class athletes resulted in increased brand awareness, which now sits at 33 percent, according to YouGov.

Gap Inc. said Athleta would look to build on the success in the second quarter with its launch of AthletaWell, a digital platform designed to build loyalty, engagement and a community of empowered women. In addition, following next week’s launch of Athleta online in Canada, the brand said it would be opening “soon” stores in Toronto and Vancouver.

Companywide, Gap Inc.’s net sales of $4.2 billion were the highest second-quarter sales in over a decade for the brand, up 29 percent versus 2020 and up 5 percent compared to 2019 pre-COVID levels.

Strategic permanent store closures and the recent divestitures of the Janie & Jack and Intermix businesses reduced net sales by approximately 8 percent versus 2019. The company also estimated that COVID-19-related closures in markets outside the U.S. resulted in roughly 2 percent of sales decline versus 2019.

Comparable sales were up 3 percent year-over-year and up 12 percent versus 2019.

Among its other brands:

  • Old Navy Global: Net Sales were up 21 percent versus 2019, with the brand maintaining its position as the #2 apparel brand in the U.S. Comparable sales were flat to last year and up 18 percent versus 2019.
  • Gap Global: Net Sales declined 10 percent versus 2019, with permanent store closures resulting in an estimated 14 percent sales decline and international COVID-19-closures driving an estimated one percent decline on a two-year basis. Global comparable sales declined 5 percent year-over-year and increased 3 percent versus 2019.
  • Banana Republic Global: Net Sales declined 15 percent versus 2019, with permanent store closures resulting in an estimated 10 percent sales decline and international COVID-19-closures driving an estimated one percent decline on a two-year basis. Comparable sales were up 41 percent year-over-year and down 5 percent versus 2019.

Gap Inc.’s second-quarter online sales grew 65 percent versus the second quarter of 2019 and represented 33 percent of its total business. Store sales declined 11 percent versus the second quarter of 2019, primarily due to 11 points of impact from divestitures and strategic closures and an estimated two-point decline due to COVID-19-closures outside of the U.S.

Gap Inc.’s reported that the second-quarter fiscal year 2021 diluted earnings per share reached $0.67. Excluding charges primarily associated with strategic changes to its operating model in Europe, adjusted earnings per share were $0.70.

“Our talented teams delivered our highest second-quarter net sales in over a decade. Our strategy is driving growth as evidenced by continued strength at Old Navy and Athleta, Gap Brand’s second consecutive quarter of positive two-year comparable sales in North America and momentum gaining at the Banana Republic. Stepped-up marketing investments, improved brand management, and technology enhancements are paying off as our brand power cuts through,” said Sonia Syngal, CEO, Gap Inc. “I look forward to our Integrated Loyalty Program and Old Navy’s inclusive shopping experience, BodeEquality taking hold in the back half, both key components of our Power Plan 2023 and important drivers of long-term sustainable growth.”

2021 Outlook

The company raised its reported full-year diluted earnings per share guidance to be in the range of $1.90 to $2.05. This outlook reflects charges incurred related to the divestiture of the Janie & Jack and Intermix businesses and estimated charges related to strategic changes in the company’s European business. Excluding these charges, full year earnings per share, on an adjusted basis, are expected to be in the range of $2.10 to $2.25. The company’s full-year outlook reflects the impact of expected headwinds in its global supply chain, potential inflationary pressures and current COVID environment. The company continues to leverage the scale and strength of its advantaged platform to navigate through near-term volatility.

Previously, Gap Inc. expected EPS in the range of $1.55 to $1.70 or $1.60 to $1.75 excluding the charges. The company now expects net sales growth for the fiscal year 2021 to be about 30 percent versus 2020, up from previous guidance in the low-to-mid twenty percent range.

“Our strong second-quarter performance, demand for our purpose-led, billion-dollar lifestyle brands and ongoing strength of the customer, gives us the confidence to raise our sales and earnings outlook for the second consecutive quarter,” said Katrina O’Connell, executive VP and CFO, Gap Inc. “As we fuel profitable growth for the back half and beyond, we are focused on strategic expansion of addressable markets to take share, building customer lifetime value and launching new initiatives to transform Gap Inc. for the future digitally.”

Photo courtesy Athleta