Gap's profit falls 32% as marketing expenses rise

Gap's profit falls 32% as marketing expenses rise

The retailer reported a surprise rise in third-quarter quarter comparable sales

Representative image. Credit: iStock photo.

Gap Inc reported a 32% slump in quarterly profit on Tuesday, hurt by higher marketing expenses, sending the apparel retailer's shares down about 7% in extended trading.

The retailer reported a surprise rise in third-quarter quarter comparable sales, powered by online demand for its Athleta athleisure wear and Old Navy apparel from stuck-at-home customers.

The San Francisco-based retailer reported a net income of $95 million, or 25 cents per share, in the quarter ended Oct. 31, down from a profit of $140 million, or 37 cents per share, a year earlier.

Comparable sales rose 5%, compared with the average analyst estimate of a 0.62% fall, according to IBES data from Refinitiv.