Analysts upbeat on Gap despite February fall
Comparable store sales fell 9% at Gap's namesake brand
Analysts remain upbeat about Gap Inc's prospects despite the US clothing giant reporting a comparable store sales decline in February, weighed down by its namesake and Banana Republic brands.
The San Francisco-based retailer said comparable store sales fell 4% for the four weeks to 28 February. Gap's namesake and Banana Republic brands reported declines of 7% and 5% respectively. Meanwhile, Old Navy saw flat comparable store sales.
Net sales edged down 1.2% to $918m from $929m a year ago.
“Recognising that February is a relatively small sales month, we’re focused on the spring shopping months ahead and delivering on our full-year goals,” said CFO Sabrina Simmons.
Stifel analyst Richard Jaffe agrees. “We anticipate incremental improvement during the key spring shopping months of March and April, particularly as weather and merchandise flows improve,” he said.
While FBR&Co analyst Susan Anderson noted: “We continue to believe that Gap has a substantial opportunity to drive 2015 upside via supply chain/omni-channel, AUR clawback, cotton benefits, easy compares, and buybacks that should help offset Gap pressure.”
Last week, Gap named a new head of design and product development for its namesake brand, after the unit continued to weigh on the company's sales during the fourth-quarter.
Speaking on a conference call, CEO Art Peck said central to the problems at Gap is an “aesthetic issue”, which the company is now working on “with urgency”.
Click on the following link for further insight on Gap's plans: New Gap CEO set to tackle “aesthetic issue”.
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