Gap Inc today (10 April) described its March sales as "disappointing," but said it managed to improve merchandise margins and reiterated its full-year earnings guidance.

The San Francisco-based company said net sales for the five weeks to 5 April fell 12% to of $1.37bn, from $1.55bn in the same period last year.

The company's comparable store sales were down 18%, compared with a 6% rise for March 2007.

By division, same-store sales at Gap North America were down 14% versus a rise of 4% last year, Banana Republic North America fell 8% compared with an 8% increase last year, and Old Navy North America tumbled 27% against a rise of 10% last year.

International same-store sales were down 3% compared with a fall of 5% last year.
 
"Overall March traffic and sales results across our brands were disappointing, particularly at Old Navy," said Sabrina Simmons, chief financial officer of Gap Inc.

"With our continued inventory discipline across the brands, we delivered merchandise margins above last year.

"As we execute our strategy of delivering healthier earnings through improved margins and cost management, we remain comfortable with our previously communicated 2008 annual earnings per share guidance of $1.20-$1.27."