Home > Uncategorized > Gap Comps Negative Again; Does it Signify Lasting Weakness?

Gap Comps Negative Again; Does it Signify Lasting Weakness?

Growth at Old Navy can be attributed to strong back-to-school selling in August that benefited from consistent focus on enhancing product assortments across its portfolio. However, the company’s results reflected the impact of shift in the timing of Labor Day holiday by one week this year, which more than offset the gains from a shift in tax-free holidays, in some states, to August this year from July last year.

Consequently, shares of Gap descended 2.3% in the after-hours trading session yesterday.

Coming to the sales results, the company’s comps for August decelerated 2% owing to a decline in comps at both Gap and Banana Republic brands, partially offset by growth in Old Navy. Net sales totaled $1.20 billion for the four weeks ended Aug 29, 2015, down 3% year over year. On a constant currency basis, sales were flat with the prior-year period.

Brand-wise, August comps for Gap Global fell 8% compared with a 6% decline recorded in the year-ago period, while comps for Banana Republic Global dipped 11% compared with a 2% decline last year. On the other hand, comps for Old Navy Global rose 6% compared with a 2% increase recorded in the prior-year period.

Apart from Gap, certain other retailers also posted their comps data for August. While Rite Aid Corp. (RADAnalyst Report) and L Brands Inc. (LBAnalyst Report) witnessed comps growth of 1.6% and 6%, respectively, comps at Costco Wholesale Corp. (COSTAnalyst Report) descended 2%.

Gap, which carries a Zacks Rank #3 (Hold), is scheduled to release its September sales on Oct 8.

– See more at: http://www.zacks.com/stock/news/189083/gap-comps-negative-again-does-it-signify-lasting-weakness#sthash.lq0CJbKv.dpuf

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