The company also forecast fourth-quarter sales to be flat or slightly higher than last year, and warned retailers about the pressure on the margins from higher shipping costs, including air cargo, as they rush to move goods ahead of the holiday season.
Online sales rose 61% in the third quarter as home customers bought for comfortable joggers, yoga pants and tops from its old Navy and Atleta brands, which helped cape report a surprising increase in comparable sales.
But it came at a cost, and operating costs rose about 8% quarterly.
Cape, which has launched digital campaigns such as “Stand United” and “Be the Future”, will continue to make marketing investments, said CEO Sonia Singhal.
“With this coveted environment and weak players seeing a significant amount of disruption, we see this as an important time to invest in our brands on demand,” Single told analysts.
Comparable sales rose 5%, which disturbed the average estimate of 0.62%, according to Refinitio’s IPES data.
Store sales fell 20% in the third quarter, and while reopening lucrative old Navy and Athletic stores, Cape reaffirmed his intention to close several hundred breakout and banana Republic stores worldwide.
The San Francisco-based retailer has announced $ 95 million, or 25 cents a share, for the three months ending Oct. 31. It was $ 140 million a year ago or 37 cents a share.
Analysts expected the company to earn 32 cents a share.
(Reported by Nivedita Balu in Bangalore; Editing by Sriraj Kalluvila)
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