Gap Comps Fall, Guides Higher

One of the leading global specialty retailers, Gap Inc. (GAP), continues to record comparable store sales results in the red. Last January, Gap registered a decline of 4% in same-store sales for the four-week period ended January 28, 2012, with sales declining across the board. The year-over-year comparison also looked jaded with the company recording a growth of 3% in the prior-year comparable period.

January 2012 Sales

Gap witnessed a contraction in same-store sales across each of its segments, except Banana Republic North America. Gap North America’s same-store sales declined 5% versus 2% rise in the prior-year period.

The company’s same-store sales in the international region plunged 10% compared with an increase of 9% in the year-ago period. Same-store sales at Old Navy North America fell 6% compared with flat last year. However, the company reported growth of 6% in Banana Republic North America segment compared with a positive 2% growth in the prior-year period.

Net sales for the four-week period ended January 28, 2012 inched down 1% to $833 million compared with net sales of $843 million in the prior-year period, primarily driven by sluggish performances across all of the company’s businesses.

Fourth-Quarter 2011 Sales

During fourth-quarter 2011, the company’s comparable sales declined 4% compared with an increase of 1% in the prior-year quarter. Consequently, Gap’s net sales during the quarter inched down 2% to $4.28 billion compared with $4.36 billion in the previous-year quarter.

The company has reported negative comparable sales result in all the four quarters of fiscal 2011. However, despite declining comparable sales result, the company is expecting earnings in the range of 41 – 42 cents per share, well above the Zacks Consensus Estimate of 35 cents.

Fiscal 2011 Sales

In fiscal 2011, Gap has reported a decline in comparable sales every month, except April and June. During the fiscal, the company has reported a decline of 4% in comparable sales compared with an increase of 2% during the same period in fiscal 2010.