Gap April sales fall more than expected
Apparel retailer Gap Inc. said Thursday its same-store sales fell 6% in April, widely missing analyst expectations, hurt by weak results at Old Navy and international stores.
Analysts surveyed by Thomson Financial expected combined same-store sales to fall just 1.9%.
Same-store sales, or sales at stores open at least a year, is a key measure of retailer performance, because it measures growth at existing stores rather than from newly opened ones.
For the four-week period ended May 3, same-store sales were flat at namesake Gap (GPS, Fortune 500) stores and Banana Republic, down 12% at Old Navy and down 7% at international stores.
Analysts had predicted declines of just 4.5% and 2.7% at Old Navy and overseas, respectively, while expecting Banana Republic stores to post a 2.8% increase. Gap’s North America same-store sales were slightly better than Wall Street’s projection for a 1% decline.
Total sales rose 1% to $1.1 billion from $1.09 billion last year.
For the fiscal first quarter ended May 3, same-store sales fell 11%, while total sales fell 5% to $3.38 billion credit report. Analysts expected higher sales of $3.45 billion.
Gap said though traffic patterns and sales continue to be challenging, it reaffirmed its earnings outlook for the year.
The company continues to expect earnings between $1.20 and $1.27 per share, while analysts polled by Thomson Financial, on average, expect a profit of $1.23 per share.
The San Francisco-based company said it expects first quarter net of 30 cents to 32 cents per share, including a $15 million tax benefit.
Analysts expect earnings of 27 cents per share. Analyst estimates usually exclude one-time items.