By Neil Haggerty 

Gap Inc. reported lower sales in July and provided disappointing earnings guidance for its second quarter, hurt by continuing weakness at its namesake stores and the stronger U.S. dollar.

For the four weeks ended Aug. 1, Gap reported sales of $1.12 billion, down from $1.17 billion a year earlier.

The retailer said it now projects second-quarter earnings excluding certain one-time items of between 63 cents and 64 cents a share, less than analysts expectations of 66 cents a share, according to Thomson Reuters.

On a reported basis, the company expects per-share earnings between 51 cents and 52 cents. Gap plans to release its second-quarter earnings Aug. 20.

In July, sales at the company's namesake stores--excluding those newly opened or closed--fell 7%, compared with a 2% decrease a year earlier. Same-store sales at Gap's Banana Republic fell 10%, compared with 6% growth a year earlier.

Same-store sales at Old Navy rose 3%, similar to a year earlier.

Shares were essentially flat in early after hours trading.

In June, Gap announced plans to close about a quarter of its namesake stores in North America, the second major round of cuts in four years as the company struggles to rehabilitate the brand.

The retailer once claimed the title of the world's largest specialty-apparel chain by expanding to virtually every mall and city center in the U.S. But with the chain's sales slumping and consumers doing more of their shopping online, Gap is left saddled with too much real estate in undesirable locations.

Gap's problems go beyond its bloated store base: The retailer has been unable to hit the right fashion trends, resulting in steep sales declines.

Write to Neil Haggerty at neil.haggerty@wsj.com

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