US: July same-store sales drop 4% at Gap
Apparel retailer Gap said yesterday (3 August) that same-store July sales dropped 4% and predicted a second-quarter profit well below Wall Street forecasts.
While the same-store decline was static from last July, net sales grew 1% to US$1.04bn at the group, which has been struggling to reverse its flagging sales and become more trend-right.
By division, Gap North America same-store sales fell 13% compared to an 8% drop last year, Banana Republic North America sales were flat compared to a 7% rise last year, Old Navy North America sales were flat compared to a 5% drop last year and international sales fell 6% compared to 4% growth last year.
"We put a strategic plan in place this year to improve product, refresh stores, and support our brands to achieve better results in the second half of the year and beyond," said Sabrina Simmons, senior VP treasury and investor relations.
"As part of this plan, Gap and Old Navy decided to take aggressive markdowns in July to clear product and enable a clean presentation of fall assortments, which arrived late in the month. This resulted in July merchandise margins significantly below last year."
For the 13 weeks ended 29 July, same-store sales fell 5% compared with a 3% fall last year, while net sales were $3.72bn, static from last year.
The company expects earnings per share for the second quarter to be $0.13 to $0.15.
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