By Cassandra Jaramillo
Gap Inc. said its companywide same-store declined slightly more
than expected in June, as the company faced headwinds with currency
effects and shipment delays in recent months.
Sales at established stores declined 1%, narrower than the
company's 2% decline a year earlier but still steeper than the
decline of 0.5% that analysts polled by Thomson Reuters had
expected.
"During June, we continued to work through the late-arriving
units caused by the port delays earlier in the year," a Gap
spokeswoman said. Shipping snafus on the West Coast caused by
problems at two major ports have irked the retail sector in recent
months.
Gap said June net sales were flat at $1.54 billion at
established stores. However, on a constant currency basis, the
company said sales increased by 2%.
In November, the company made the decision to overhaul the
leadership of its namesake brand. But Chief Executive Art Peck, who
took the helm in February, said improvements might not be visible
until spring 2016. The company said in June it planned on closing
175 North American Gap stores over the next few years.
Gap said sales at stores, excluding newly opened and closed
stores, fell 5% at its namesake brand and rose 1% at Banana
Republic.
Analysts had expected a 3.8% decline in same-store sales at the
Gap brand and a decline of 1.1% at Banana Republic.
Old Navy, the best performing brand for Gap in recent months,
reported a 1% increase in same-store sales, falling below analysts'
expectations of a 2.6% increase in sales. The store has borrowed
techniques from "fast fashion" retailers, like shortening its
supply pipeline so it can quickly reorder items that sell well.
The retailer is scheduled to report second-quarter results in
August.
Write to Cassandra Jaramillo at Cassandra.Jaramillo@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires