Despite falling January, fourth quarter and full year sales, clothing retailer Gap Inc yesterday (7 February) raised its fiscal earnings guidance. 

The San Francisco-based retailer, said for the four weeks to 2 February, net sales fell 21.7% to $932m, compared with $1.19bn in the five-week period of the previous year.

Comparable store sales for January were down 2% compared with flat same-store sales last January.

By division, same-store sales were down 4% at Gap North America and dropped 3% at Old Navy North America, while international sales fell 5%.

Banana Republic North America was the only division to post a same-store increase, with sales up 5%.

"January is a clearance month for our company and our brands focused on selling their holiday merchandise to make room for spring assortments," said Sabrina Simmons, chief financial officer of Gap Inc.

"Despite the fact that we entered the month with more units than we had planned, our efforts to clear merchandise were successful and total company merchandise margins were slightly above last year."

In the fourth quarter, total company sales were $4.67bn, marginally down on last year's $4.92bn. Comparable store sales decreased 3%.
For the year, sales were $15.76bn compared with $15.92bn in the 53-week year before. Fiscal year 2007 comparable store sales dropped 4%.

However, Gap expects earnings per share for the fourth quarter to be $0.33 to $0.35 on a GAAP basis, and raised its fiscal guidance from $0.92 to $0.98 per share to $1.03 to $1.05 per share.