Casual clothing giant Gap has suffered a 5 per cent slump in October same-store sales as well as a 7 per cent decrease in third-quarter same-store sales.

Gap said net sales grew 2 per cent to $1.28 billion for the four-week period ended 29 October compared with sales of $1.30bn last year. The 5 per cent same-store slip compared with a 3 per cent increase in October last year.

Gap North America same-store sales dropped 3 per cent compared with a 5 per cent increase last year, Banana Republic North America same-store sales dropped 8 per cent compared with a 3 per cent rise, and Old Navy North America same-store sales dropped 6 per cent compared with a 4 per cent increase. International sales during the month fell 9 per cent compared with a 9 per cent drop last year.

Sabrina Simmons, Gap senior vice president, treasury and investor relations, said: "We began October with continued traffic challenges. However, traffic improved at the end of the month, likely due to favourable weather trends and the delivery of our holiday merchandise."

The company's third-quarter same-store sales decreased 7 per cent compared with a decrease of 1 per cent in the third quarter of the prior year.

Gap North America third-quarter same-store sales dropped 4 per cent compared to static sales last year, Banana Republic North America sales fell 7 per cent compared with a 3 per cent rise, Old Navy North America sales decreased 8 per cent compared with a 1 per cent fall, and international sales dropped 10 per cent compared with a 10 per cent fall.

For the 13 weeks ended 29 October 29, net sales were $3.9bn, a decrease of 3 percent from net sales of $4.0bn for the same period in 2004.

The company expects earnings per share for the third quarter to be $0.23 to $0.24.
   
Gap now operates 3,117 store locations compared with 3,051 store locations last year.