Gap Inc.’s quarterly sales rebounded from spring shutdowns but increased marketing weighed on profits. Executives cautioned that rising Covid-19 infections could slow visits to stores during the critical holiday shopping period.
The company behind the Gap, Old Navy, Banana Republic and Athleta brands said Tuesday sales for its fourth quarter, which includes the holiday stretch, will be flat or slightly higher than the year earlier.
Chief Executive Sonia Syngal told analysts that with so many competitors struggling, the company has a “unique time to consolidate market share.” Because consumers are unable to spend on travel and other experiences due to the pandemic, she said she is hopeful they will shell out more money for apparel and other products during the holiday season.
“We think the consumer is in a good place,” Ms. Syngal said. “Apparel is a great category when customers can’t spend on travel, events and those types of things.”
Ms. Syngal took on the top job at the long-struggling company in late March, days after it temporarily closed all of its stores in the U.S. and Canada due to the initial spread of the coronavirus. She is attempting to oversee a turnaround at its namesake brand by closing stores, exiting malls and streamlining product offerings, while also boosting the Old Navy and Athleta businesses.