Gap Inc said on Thursday that sales at stores open at least a year fell 7 percent in July. Analysts on average had been expecting the San Francisco-based clothing retailer to post a same-store sales decrease of 4.7 percent, according to Reuters Estimates.
The operator of the Gap, Banana Republic and Old Navy chains - which recently named Canadian drugstore executive Glenn Murphy as chief executive - said total sales for the four weeks that ended July 29, rose 1 percent to about $1.05 billion.
"During July, we cleared through summer product at all three brands and total company merchandise margins were significantly above last year," Sabrina Simmons, Gap's senior vice president of corporate finance, said in a statement.
Same-store sales at the Gap in North America climbed 2 percent in July versus a 13 percent decline last year, and they inched up 1 percent at Banana Republic, compared with a flat total a year earlier.
Same-store sales at Old Navy fell 18 percent in July versus a flat performance last year, due to the company declining to repeat two sales events. Sales at the chain were also hurt by the company's move to sell fall clothing in July, a move Gap said did not resonate with consumers who were still focused on summer clothes. International same-store sales meanwhile, rose 11 percent for the month, compared with a 6 percent dip last year.
Looking ahead, Gap said it expects second-quarter earnings between 19 cents and 20 cents a share, excluding items, and said it sees inventory per square foot at the end of the quarter down in the low-single digits. Analysts, on average, were expecting Gap to earn 12 cents a share for the quarter on a GAAP basis, and 13 cents on a non-GAAP basis, according to Reuters Estimates.
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