Reuters. Pictured is a Gap Inc. retail store in La Jolla.

By Nivedita Balu

(Reuters) – Apparel retailer Gap Inc (N:) posted an unexpected 13 percent rise in quarterly comparable sales on Thursday as consumers stranded at home by the COVID-19 outbreak bought more Old Navy and Athleta apparel online.

People who work or study at home have been stocking up on comfortable “stay-at-home” clothing, including fleece and activewear, boosting demand for the company’s affordable Old Navy brand, athleisure brand Athleta and Gap apparel.

Same-store sales were up 13 percent, according to Refinitiv’s IBES data, while analysts were forecasting a 20.97 percent decline.

The San Francisco-based retailer said it nearly doubled its e-commerce business in the quarter ended Aug. 1, with online penetration at about 50 percent and added about 3.5 million new customers.

CEO Sonia Singhal told analysts: “We have won in the value area of Old Navy and we have won in the premium area of Athleta.” He added that the company alone has sold about $130 million worth of masks.

While the company expects demand for the two brands to spur sales, it plans to close more than 225 unprofitable Gap and Banana Republic stores worldwide as part of a restructuring plan.

Syngal said the back-to-school season is one of the company’s busiest periods, and may be longer, and that Gap has the “right breed” of kids ready to learn, whether they’re at home or in the classroom.

Gap posted a second-quarter net loss of $62 million, or 17 cents a share, compared with a profit of $168 million, or 44 cents a share, a year earlier.

Net sales fell about 18 percent to $3.28 billion, but topped expectations of $2.91 billion.

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2020-08-27