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Gap Reports Weak March Comps

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As expected earlier, a calendar shift in Easter timings adversely impacted Gap Inc.’s (GPS) comparable-store sales (comps) results for the 5-week period ended on Apr 6. The company reported a negative 1% comps performance for the period compared with 8% growth registered in Mar 2012.

Global brand-wise, comps performances at Gap Global were flat against 7% growth recorded in the prior-year period, while Banana Republic registered a 1% increase compared with a 5% rise in Mar 2012. However, Old Navy’s comps slumped 2% versus an 11% increase in March last year.

The company witnessed continued strength in its namesake and Banana Republic brands’ jeanswear and woven tops. However, comps at Gap’s Old Navy brands were negatively impacted by an earlier shift in Easter timings.

Further, the company indicated that the comps results for March this year are compared with the 5-week ended Apr 7, 2012, due to the inclusion of the 53rd week in fiscal 2012. March comps remained strongest in the first 4 weeks but were weakest in the last week.

Concurrently, 3 other retailers – Zumiez Inc. (ZUMZ), Ross Stores Inc. (ROST) and Buckle Inc. (BKE) – reported same-store sales for the month of March. Comps growth at Zumiez and Ross Stores were 2.1% and 2%, respectively, while comps remained flat at Buckle.

However, Gap’s net sales for the 5-week period summed to $1.56 billion compared with the year-ago period sales of $1.46 billion, representing a 7% year-over-year increase. Management said that the net sales results were compared with the 5-week period ended Mar 31, 2012, which did not include the peak sales week of Easter.

This Zacks Rank #2 (Buy) company is scheduled to release its April sales results on May 9, 2013.

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