Gap Inc lowered its projection for 2021 sales and profit as supply-chain bottlenecks led to lost sales and higher expenses. The shares fell in trading.
Gap now sees revenue growing about 20% for the full year — down from its previous projection of a 30% gain.
Analysts had projected revenue to be 28% higher this year, according to estimates compiled by Bloomberg.
The owner of the Old Navy and Banana Republic brands also slashed its profit outlook, citing “an estimated $550 to $650 million of lost sales from supply-chain constraints on available inventory, as well as approximately $450 million
in total air freight expense for the year.”
The outlook, released in tandem with quarterly results, reinforces the challenging outlook that retailers face as demand stays robust. “While we entered the third quarter with growing momentum, acute supply-chain headwinds affected our ability to fully meet strong customer demand,” Chief Executive Officer Sonia Syngal said.