Gap sees lift in Q4 thanks to digital (GPS)

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Gap Inc.’s net sales increased 1% year-over-year (YoY) to $4.43 billion in Q4 2016, exceeding analyst estimates of $4.4 billion.

In addition, Gap reported that net sales for January 2017 were up 2% from last year, which points more to a sustained turnaround than a holiday bubble.

Meanwhile, the company's recent success comes in stark contrast to other retailers — both Macy’s and Kohl’s cut their earnings estimates after holiday results fell short of expectations. 

The company may finally be honing its digital strategy. Gap focused on reducing its brick-and-mortar count and improving its online store in Q4. The firm, for instance, improved site performance, added content to generate interest, and optimized the experience for shoppers in Asia specifically. This is a marked departure for Gap, which until now has shown relatively little power on the digital front, and suffered declining sales as a result. It seems the company is finally waking up to the need to compete in the e-commerce space, and a focused digital strategy will be key for Gap moving forward as it looks to cement its turnaround.

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