Gap projects sales growth in fiscal 2021 By Reuters

© Reuters. A Gap Inc. retail store is shown in La Jolla

(Reuters) – Gap Inc (NYSE:) forecast a return to sales growth this year after struggling due to the COVID-19 pandemic for months, betting on the strength of its Old Navy brand and as the roll-out of vaccines is expected to bring customers back to stores.

The retailer forecast fiscal year 2021 net sales to reflect mid- to high-teens growth versus the previous year.

The company said it expects the first half of 2021 to be impacted by the pandemic and to return to a more normalized, pre-pandemic sales level in the back half of the year.

The retailer’s focus on its digital presence helped it attract customers who shifted to online shopping due to the virus outbreak, which helped Gap recoup some of the lost sales due to store closures.

It plans to open 30 to 40 Old Navy stores and 20 to 30 Athleta stores, and close about 100 Gap and Banana Republic stores globally in fiscal 2021.

For the fourth quarter, Gap missed Wall Street estimates, hurt by weakness at its namesake brand and Banana Republic.

Net sales fell about 5% to $4.42 billion in the fourth quarter ended Jan. 30. Analysts were expecting $4.66 billion, according to IBES data from Refinitiv.

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