Shares of Gap Inc., the largest U.S. retailer focused on apparel, fell in late trading Thursday after the company reported an unexpected drop in comparable-store sales for June.
Sales at stores open at least a year, including online orders, fell 2 percent, the San Francisco-based company said in a statement. Retail Metrics Inc., a research firm that tracks the industry, had estimated a gain of 0.8 percent.
Sales at Gap’s flagship chain and its Banana Republic stores both fell 7 percent last month. The lower-end Old Navy chain fared better, gaining 7 percent. That beat the 1.1 percent rise analysts had projected. Still, all three divisions performed worse than in the year-earlier period.
“Despite softer June results at Gap and Banana Republic, we remain focused on delivering in the upcoming fall season,” Chief Executive Officer Glenn Murphy said in the statement.
Murphy has been working to buoy same-store sales after a 1 percent decline last quarter, the first quarterly drop since 2011. Gap is investing in technology to improve its online and in-store services, as well as boosting U.S. employees’ pay to at least $10 by 2015 — a move the company says will help enhance customers’ experiences.
Gap shares were down 1.3 percent at $40.44 at about 5:30 p.m. in New York, after falling as low as $38.78 in extended trading after the sales figures were released. The stock, down 7.1 percent over the past year, closed at $40.97 in New York.
The latest results show Gap is still struggling to find its footing after a slow start to the year, when a harsh winter hurt the entire U.S. retail industry. Old Navy has been a bright spot, thanks to its low prices and popular “ath-leisure” apparel, which combines athletic and leisure wear.
U.S. retailers have posted mixed same-store sales results for June, with five of the nine companies that report results missing estimates, according to Retail Metrics.
© Copyright 2022 Bloomberg News. All rights reserved.