Gap has lowered its full-year guidance after it revealed supply chain disruption has dented its Q3 sales and led to higher expenses.
In a trading update for the quarter, Gap said it now expects revenues to grow around 20% for the year compared with previous estimations of 30%.
It also said it expects adjusted full-year diluted earnings per share to be in the range of $1.25 – $1.40 (£0.94-£1.05) as it estimates $550m (£411m) to $650m (£486m) of lost sales “from supply chain constraints on available inventory”, as well as approximately $450m (£336m) in total air freight expense for the year.
It comes as it reported that third quarter comparable sales increased 5%, while net sales of $3.9bn (£2.9bn) were down 1% compared to 2019 pre-COVID levels.
It added that online sales increased 48% compared with Q3 2019 and represented 38% of total business.
Sonia Syngal, CEO, Gap Inc, said: “While we entered the third quarter with growing momentum, acute supply chain headwinds affected our ability to fully meet strong customer demand. Still, we made an intentional investment in building enduring customer loyalty with accelerated use of air freight to serve them this holiday, choosing long-term growth opportunity over near-term impact to profitability.
“Current pressures have not distracted us from what matters: growing our billion-dollar brands, delighting our over 64 million customers with product and experiences that drive lifetime value and restructuring and digitising our business with an eye on creating a better future, faster.”