Gap Falls After Unexpected Drop in June Same-Store SalesLindsey Rupp
Gap Inc. shares fell after the biggest apparel-focused retailer in the U.S. posted an unexpected drop in comparable-store sales for June.
Sales at stores open at least a year, including online orders, fell 2 percent, the San Francisco-based company said in a statement after markets closed yesterday. Retail Metrics Inc., a research firm that tracks the industry, had estimated a gain of 0.8 percent.
“Despite softer June results at Gap and Banana Republic, we remain focused on delivering in the upcoming fall season,” Chief Executive Officer Glenn Murphy said in the statement.
Murphy has been working to buoy same-store sales after a 1 percent decline last quarter, the first quarterly drop since 2011. Gap is investing in technology to improve its online and in-store services, as well as boosting U.S. employees’ pay to at least $10 an hour by 2015 -- a move the company says will help enhance customers’ experiences.
Gap’s shares fell 0.8 percent to $40.65 at the close in New York. The stock has declined 9.2 percent during the past year.
Sales at Gap’s flagship chain and its Banana Republic stores both fell 7 percent last month, the company said yesterday. The lower-end Old Navy chain fared better, gaining 7 percent. That beat the 1.1 percent rise analysts had projected. Still, all three divisions performed worse than in the year-earlier period.
The latest results show Gap is still struggling to find its footing after a slow start to the year, when a harsh winter hurt the entire U.S. retail industry. Old Navy has been a bright spot, thanks to its low prices and popular “ath-leisure” apparel, which combines athletic and leisure wear.
U.S. retailers have posted mixed same-store sales results for June, with five of the nine companies that report results missing estimates, according to Retail Metrics.