Gap July Comparable Sales Fell More Than Expected
09 August 2016 - 8:10AM
Dow Jones News
By Tess Stynes
Gap Inc. said its comparable sales fell a steeper-than-expected
4% during July on declines at its Banana Republic and namesake
brands.
Shares, down 27% in the past 12 months, fell 4.8% to $24.40 in
recent after-hours trading despite the apparel retailer's per-share
earnings view for the latest quarter, which was better than
expected.
For the four weeks ended July 30, Gap said comparable sales fell
14% at Banana Republic and 4% at its namesake brand.
Analysts polled by Thomson Reuters had expected Gap's overall
comparable sales to decline 0.3% last month, including a drop of
3.9% at Banana Republic and a decrease of 1.4% at its namesake
brand. Comparable sales were flat at Old Navy during July, compared
with analysts' estimates for an increase of a 1.6%.
"While performance varied during the quarter, we made progress
on our streamlining initiatives and continued to see signs of
improvement in our larger brands," Chief Financial Officer Sabrina
Simmons said.
For the latest quarter, Gap expects adjusted per-share earnings
of 58 cents to 59 cents, above analysts' expectations of 48 cents a
share.
Gap said its comparable sales fell 2% during the quarter and
preliminary net sales were $3.85 billion. Analysts had expected
revenue of $3.78 billion.
In May, Gap warned of weak sales across its brands and said it
would take steps to streamline its business, including evaluating
its Banana Republic and Old Navy operations outside North
America.
Gap has been squeezed by fast-fashion retailers such as H&M
owner Hennes & Mauritz AB and Zara owner Inditex SA, which push
low-price items and shift their selections quickly. To combat the
sales slump, Gap CEO Art Peck has brought in new executives and
promised to source goods more quickly. The company has also been
shrinking its footprint by closing dozens of locations.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
August 08, 2016 17:55 ET (21:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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