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Gap Rallies After Its Old Navy Chain Sees Sales Rebound

  • The chain’s sales were better than projected in September
  • Fire at distribution center is taking toll on results, though
Clothes Displayed at an Old Navy Store
David Paul Morris/Bloomberg
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Improvements in Old Navy’s product selection brought a sales surge to Gap Inc.’s biggest chain last month -- and the stock’s biggest rally in almost eight years.

The brand’s same-store sales gained 4 percent in September, Gap said on Thursday. Analysts had projected growth of less than 1 percent, according to Retail Metrics. The results helped offset an overall sales decline, which were worsened by a fire at one of Gap’s key distribution centers in August, and sent the company’s shares up as much as 17 percent.