Gap Inc. (GPS - Free Report) posted comparable-store sales (comps) increase of 1% for the 4 weeks ended Aug 3, 2013 compared with a rise of 10% for the 4 weeks ended Aug 4, 2012. This was below the analysts’ expectations. The marginal increase came on the back of sturdy performance at the Gap global brand. However, Banana Republic and Old Navy Global failed to produce the desired results.
Net sales in July totaled $1.12 billion, up 5% from sales of $1.06 billion for the 4-week period ended on Jul 28, 2012.
Brand-wise, comps performances at Gap Global were up 7% compared with a 10% increase in the prior-year period, while comps at Banana Republic were down 1% compared with an 8% rise recorded last year. Old Navy’s comps decreased 5% versus a 12% increase last year.
For the second quarter of fiscal 2013, the company’s net sales increased 8% to $3.87 billion from $3.58 billion in the prior-year period. During the quarter, comps rose 5% compared with a 4% increase in the year-ago quarter.
Brand-wise, second-quarter comps at Gap Global increased 6% compared with a 3% rise in the prior-year period, while comps at Banana Republic Global fell 1% compared with a 6% rise last year. Old Navy Global’s comps rose 6% versus a 3% increase last year.
Based on strong sales results, the company expects second-quarter earnings per share in the range of 62–64 cents, compared with 49 cents reported in the year-ago quarter. The Zacks Consensus Estimate stands at 64 cents.
Apart from Gap, other retail chains that posted comparable-store sales data for the month of July include L Brands, Inc. ., Stein Mart Inc. (SMRT - Free Report) and Fred's, Inc. (FRED - Free Report) . While L Brands registered comps growth of 3%, off-price retailer of apparel, footwear and accessories Stein Mart delivered comparable-store sales growth of 3.7%, and discount store operator Fred's, Inc. registered a 2.5% rise in comps.
In July, there were mixed comparable-store sales results for retailers, who tried every means to attract budget-conscious customers with discounts. Going forward, analysts believe that the back-to-school season, an important one before the holidays, may be a tough one for retailers. Recent data from the Conference Board suggested that Consumer Confidence Index fell to 80.3 in Jul 2013 from 82.1 in Jun 2013.
Gap currently carries a Zacks Rank #2 (Buy) and is scheduled to release its August sales results on Sep 5, 2013.