Fashion retailer Gap Inc. (GPS) posted flat comparable store sales (comps) for the five week period ended June 30, 2012 versus a 1% increase witnessed in the comparable prior-year period. This also compares with a 2% rise in comps registered in May.
The company’s June comps mainly benefited from the continued positive trend in its North American business. Comps for the month of June 2012 remained positive at all Gap’s segments, except International.
June comps at Banana Republic North America spiked 5% against a 3% increase recorded in the prior-year period. Gap North America’s same-store sales were up 4% versus a 1% dip recorded in the June period last year. Results at its Old Navy North America segment reflected a 1% rise in comps compared with a 2% increase in the prior-year period.
However, comps at its International segment fully offset the growth in other segments with comps dropping 14% compared with a 2% rise seen in the year-ago period.
Year-to-date, comps increased 3% compared with a 2% decline posted in the year-ago comparable period.
Net sales in June 2012 totaled $1.41 billion, up 2% from the prior-year period sales of $1.38 billion. On a year-to-date basis, the company posted net sales of $6.00 billion, reflecting a 5% growth year over year from $5.73 billion.
Gap is scheduled to release its July 2012 sales results on August 2, 2012.
On the same day, two other Apparel store retailers Ross Stores Inc. (ROST) and Nordstrom Inc. (JWN) reported positive same-store sales for the month of June 2012. Comps growth at Ross was 7% in June, while Nordstrom recorded an 8.1% growth.
We believe that Gap’s long-term strategic moves along with disciplined cost management measures will not only provide financial flexibility, but will also help to drive value proposition. Moreover, Gap’s globally recognized brands complement one another, enabling it to leverage its position in the sector.
Currently, Gap’s shares maintain a Zacks #3 Rank, which translates into a short-term Hold rating. Our long-term recommendation on the stock remains Neutral.Read the Full Research Report on GPS
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