Gap Inc. declined in late trading Thursday after reporting a steep decline in quarterly sales as the coronavirus pandemic shifted consumer spending away from apparel and office attire.

Net sales across the company’s brands fell in the period -- with its namesake chain reporting a decline of 50 per cent. While online sales improved for Old Navy and Athleta, they fell for Banana Republic and Gap, underscoring weakness at the brands that pre-dates the economic upheaval following the lockdown.

Key Insights

• The company, like many others in the industry, is not giving a fiscal year sales or earnings outlook at this time, it said. “We continue to plan conservatively as significant uncertainty remains ahead,” Katrina O’Connell, CFO at Gap, said in a statement.

• Gap says it has more than 1,500 stores open in North America, calling that restart “ahead of plan.”

• Gap, a mall stalwart, is also contending with a lawsuit with its landlord. Simon Property Group Inc. sued the retailer, saying that it had failed to pay US$65.9 million in rent for March through June. Throughout the retail industry, tenants have withheld rents to help mitigate costs as they tried to navigate the pandemic. Investors will listen for more details on the company’s rent strategy during the upcoming conference call.

Market Reaction

Gap shares fell as much as 7.3 per cent in late trading. The stock has declined 31 per cent so far this year through Thursday’s close.