Despite an 11% year-on-year fall in July same-store sales at Gap Inc, the US' largest specialty clothing retailer said yesterday (7 August) it is increasing its earnings guidance for the full-year.

Total July sales were down 5% to $998m from $1.05bn in the same month last year.

By division, comparable store sales fell 6% at Gap North America, were down 8% at Banana Republic North America, and slumped 16% at Old Navy North America. Its international sales fell 9%.

"In July, we focused on clearing through remaining summer product and preparing our stores for fall deliveries," said Sabrina Simmons, chief financial officer of Gap Inc.

"We're pleased that we delivered merchandise margins significantly above last year."

The company is increasing its guidance for earnings per share for fiscal 2008 to $1.30 to $1.35 from its previous guidance of $1.20 to $1.27.