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Bloomberg
Gap Inc lowered its projection for 2021 sales and profit as supply-chain bottlenecks led to lost sales and higher expenses. The shares fell in late trading.
Gap now sees revenue growing about 20% for the full year — down from its previous projection of a 30% gain. Analysts had projected revenue to be 28% higher this year, according to estimates compiled by Bloomberg.
The owner of the Old Navy and Banana Republic brands also slashed its profit outlook, citing “an estimated $550 to $650 million of lost sales from supply-chain constraints on available inventory, as well as approximately $450 million in total air freight expense for the year.â€
The outlook, released in tandem with quarterly results, reinforces the challenging outlook that retailers face as demand stays robust. “While we entered the third quarter with growing momentum, acute supply-chain headwinds affected our ability to fully meet strong customer demand,†Chief Executive Officer Sonia Syngal said in a statement.
Like many retailers, Gap is using air freight and diversifying its use of ports in order to overcome shipping delays.