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GPS has cited supply chain constraints due to factory closures and port congestions as the main reason behind its poor performance in the last quarter. The significant delays in deliveries affected the company’s inventory margins as well as sales, as it was not able to meet the strong market demand.
GPS’ management stated that it has been working to increase air freight and port diversification to meet the demand this holiday season. However, with the rising concerns surrounding the omicron coronavirus variant leading to the reimposition of travel restrictions worldwide, GPS’ inventory shortfall will likely continue throughout the fiscal fourth quarter (ending January 2022).
