November 20, 2009, 12:00 AM

Web sales grow for Gap, but at a slower pace

Web sales in the third quarter increased for Gap, but not nearly as fast as earlier this year. E-commerce revenue increased 4.9% in Q3 compared with 17% in Q2 and 13% in Q1.

Web sales in the third quarter increased for Gap Inc., but not nearly as fast as earlier this year.

For the quarter ended Oct. 31:

  • Web sales increased 4.9% to $298 million from $284 million in the prior year. In comparison, e-commerce sales grew year over year 17% in the second quarter and 13% in the first quarter.
  • Total sales increased 0.8% year over year to $3.59 billion from $3.56 billion.
  • The web accounted for 8.3% of sales compared to 8.0% in Q3 2008.
  • Comparable-store sales were flat compared with a decrease of 12% in the previous year.
  • Net income was $307 million compared with $246 million in Q3 2008.
“We’re pleased with our third quarter results, particularly our ability to deliver earnings 25% above last year and our highest third quarter operating margin in a decade,” says CEO Glenn Murphy. “Looking ahead to the holiday season, we’re focused on gaining market share as we invest in marketing and present a strong value proposition to customers across our brands.”

For the first three quarters:

  • E-commerce sales increased 11% to $789 million from $711 million.
  • Total sales decreased 4.6% year over year to $9.96 billion from $10.44 billion.
  • The web accounted for 7.9% of sales.
  • Net income was $750 million compared with $724 million in the first three quarters of 2008.
In the third quarter Gap announced it will open new web stores next year for its Gap, Old Navy and Banana Republic brands in Canada, and e-commerce sites for Gap and Banana Republic in the United Kingdom. The retailer plans to begin filling orders by fall.

Gap is No. 25 in the Internet Retailer Top 500 Guide, (a PDF version of the company’s financial and operating profile can be ordered by clicking on its name).

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