Gap Inc.’s same-store sales for July were lower than last year and missed the Thomson Reuters estimates.
The total Gap company reported that for the four weeks ending July 30, net sales were $1.10 billion, versus last year’s $1.12 billion. Gap Inc.’s comparable sales fell by 4 percent versus last year’s drop of 3 percent and a big miss from analysts’ expectations of a decline of just 0.3 percent.
Gap also reported that its fiscal second-quarter net sales for the total company were $3.85 billion, which was less than last year’s $3.90 billion. Still, Gap tried to put a positive spin on the numbers.
“While performance varied during the quarter, we made progress on our streamlining initiatives and continued to see signs of improvement in our larger brands,” said chief financial officer Sabrina Simmons.
The improvement she mentioned was that Gap Global’s comp sales for July were negative 4 percent — better than last year’s negative 7 percent. That’s where the good news ends. Thomson’s estimate was for a decline of 1.4 percent.
Banana Republic’s comp sales fell 14 percent in July versus last July’s negative 10 percent. Thomson’s estimate was for a decline of 3.9 percent. Old Navy was flat versus last year’s positive 3 percent.
Looking at second-quarter sales, which fell by 2 percent, Gap Global managed to show improvement with only a negative 3 percent in sales as opposed to last year’s negative 6 percent. Banana Republic’s second-quarter sales fell by 9 percent as compared to last year’s negative 4 percent and Old Navy was flat versus last year’s positive 3 percent. Thomson’s estimate was for a gain of 1.6 percent.
Jack Calandra of Gap investor relations said that performance was uneven in the quarter due to challenging traffic in May and July. Gap is maintaining its cautious view of the retail environment for the second half of the year.
Looking ahead, Gap is forecasting that second-quarter diluted earnings will be in the range of 30 to 31 cents a share and, on an adjusted basis, in the range of 58 to 59 cents. The adjustment of 28 cents comes from store closures and streamlining initiatives. The FactSet estimate is for 48 cents a share.