Gap reports huge first-quarter loss on coronavirus-led store closures

Gap Inc on Thursday reported a whopping first-quarter loss of $932 million as the apparel retailer wrote down the value of some assets due to coronavirus-driven store closures, sending its shares down about 5% after the bell.

Retailers that sell non-essential goods, especially clothing, have been crushed by restrictions imposed to contain the pandemic as they were forced to restrict their businesses to online operations and curbside pickups.

San Francisco-based Gap, which operates nearly 2,800 stores in North America, said 55% company-operated stores in North American were now open.

Chief Executive Officer Sonia Syngal said sales continued to reflect “material declines in May as a result of closures” but added that online sales were improving.

Net loss came in at $932 million, or $2.51 per share, for the three months ended May 2, compared with a profit of $227 million, or 60 cents per share, a year earlier.

The loss also included a $484 million writedown on store and operating lease assets and an inventory impairment charge of $235 million.

Net sales fell 43% to $2.11 billion from $3.71 billion.

Analysts had forecast a loss of 67 cents per share and revenue of $2.30 billion, according to IBES data from Refinitiv.