The Gap Inc. keeps struggling.
After the stock market closed Thursday, the San Francisco-based group stores reported November same-store sales that were fairly bleak across the board. Net sales decreased 9 percent compared, to a 6 percent increase last year.
Old Navy, which had been the silver lining, saw its sales drop 9 percent versus last year’s increase of 18 percent. Banana Republic continued to slide with a drop of 19 percent in comp sales versus a 2 percent increase in November 2014. Gap Global fell 4 percent, the same as last year’s drop of 4 percent. Gap stock was dropping in after market trading.
Gap’s numbers were in stark contrast to those of L Brands Inc., which was the top performer among retailers still reporting comps. The performance of L Brands, buoyed by double-digit growth at the Victoria’s Secret direct sales business, helped the apparel segment deliver better-than-expected average comps for the month, according to Thomson Reuters. The apparel component of the same-store sales index showed a 1.4 percent decline, which was ahead of an estimate of a 2.6 percent drop. However, the teen specialty portion of the index showed a 7.7 percent decline, which was steeper than the 6.8 percent estimate, according to Thomson Reuters. The teen segment was weighed down by a 7.9 percent comps decline at The Buckle Inc.
At L Brands, November same-store sales for the company’s Victoria’s Secret Catalog and victoriassecret.com business grew 12 percent. Comps at Victoria’s Secret gained 6 percent while Bath & Body Works jumped 7 percent. Total same-store sales for the company rose 7 percent.
At specialty retailer Cato Corp., November comps showed a 1 percent gain. John Cato, chairman, president, and chief executive officer, said results were slightly above expectations, “however, we remain cautious for the rest of the holiday shopping season and fourth quarter.”
For Stein Mart Inc., the month proved challenging as same-store sales declined 4.8 percent. “The entire November comparable sales shortfall occurred during the first two-and-one-half weeks of the month,” Stein Mart said in its report. “Sales then improved to flat to last year for the remainder of the month and positive in early December. Geographically, the West and the Northeast had the strongest sales in November where temperatures were cooler, while Florida and Texas performed below the chain.”
Costco Wholesale Corp. said total comps were flat for the month. The U.S. business showed a 3 percent gain, but Canada was down 10 percent while its international business was off 3 percent — due to foreign exchange costs. The company said that excluding currency translations as well as the “negative impact of gasoline price deflation,” total comps would have been a gain of 6 percent with the U.S. posting a 6 percent increase and Canada and its international business rising 8 and 7 percent, respectively.
Shelley E. Kohan, vice president of retail consulting at RetailNext, an analytics firm that specializes in the retail sector, said November sales fell 5.6 percent, with traffic declining 7.6 percent.
“Nobody wants to see a 5.6 percent decline in sales, but the decline was less than the preceding five months, which is a real positive for physical retail stores,” Kohan told WWD, adding that compared to last year, the cadence of promotions so far is “more measured.”
“Retailers are being more strategic with their pricing,” he said.
Regarding warmer weather trends during the month, Kohan said it was a bit of a paradox as the higher temperatures kept shoppers out of stores for most of November yet the mild weather helped drive traffic for the Thanksgiving and Black Friday period.