Gap September Comps in the Red
The Gap Inc. (GPS) posted a comparable-store sales (comps) decline of 3% for the 5-week period ended Oct 5, 2013, compared with a 6% rise for the 5 weeks ended Oct 6, 2012. The dip was mainly driven by comps decline at the company’s Gap Global, Banana Republic Global and Old Navy Global brands.
Brand-wise, comps performances at Gap Global were down 3% compared with a 3% increase in the prior-year period. Comps at Banana Republic Global dipped 5% compared with a 4% rise recorded last year. Old Navy Global’s comps slipped 2% versus a 10% increase last year.
Gap’s comps for the month were also below analysts’ expectations as consumers remain cautious with their spending habits due to the increased economic uncertainty. Net sales in September totaled $1.46 billion, almost flat compared to sales of $1.45 billion for the 5-week period ended on Sep 29, 2012.
The difference in the year-ago comparable periods for net sales and comps is attributed to the 53rd week in fiscal 2012.
Apart from Gap, other store chain retailers that posted comparable-store sales data for the month of September include The Buckle Inc. (BKE), Stein Mart Inc. (SMRT) and Zumiez Inc. (ZUMZ). While Stein Mart delivered comps growth of 5.0%, Buckle registered comps decline of 4.5% and comps for Zumiez were down 0.6%.
In September, comparable-store sales results for most retailers were down due to the lack of new product launches that resulted in a failure to attract customers who are hesitant to spend in an uncertain economic environment. Higher tax rates, uncertainty about the implementation of the Affordable Care Act and the first government shutdown in 17 years are factors that are holding back customers from spending.
Gap currently carries a Zacks Rank #3 (Hold) and is scheduled to release its October sales results on Nov 7, 2013.
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