Gap Inc yesterday said sales at stores open at least one year were flat in June, ending seven straight months of same-store sales declines.

However, year-to-date same-store sales at Gap dropped 4 per cent, compared with a 5 per cent increase a year ago.

The San Francisco-based specialty retailer described June as a "transitional" period for clearing summer merchandise.

Net sales in June were $1.52 billion, up 3 per cent compared with $1.48 billion in the same period a year ago.

In terms of its chains, the company said June same-store sales rose 3 per cent at Gap North America, dropped 6 per cent at Banana Republic North America, and were unchanged at Old Navy North America.

Overseas same-store sales rose 1 per cent the retailer added.

The clothing retailer, which currently operates 3,024 stores worldwide, backed its full 2005 year earnings forecast of between $1.44 to $1.48 per share.