The Gap Inc.
) tumbled nearly 2.7% in the after-hours trading session
yesterday following the company's yet another month of negative
sales results. The company posted a 6% decline in comparable
store sales (comps) for March against a decline of 1% in March,
2013. The company's February comps also haddeclined 7% compared
with an increase of 3% in Feb 2013.
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Net sales for the five-week period ended April 5, 2014, came in
at $1.51 billion. None of the company's brands performed well as
comps remained negative across the board.
were down 7% compared with flat comps in the prior-year period.
Old Navy Global'
s comps declined 7% versus a 2% decrease in March 2013, while
Banana Republic Global
fell 4%, against a 1% increase in the year-ago period.
However, management had earlier factored in weak sales due to the
shift of Easter in April compared with March last year.
Though Gap disappointed on the sales front, the company
reaffirmed its fiscal 2014 earnings guidance. Gap remains
confident of achieving earnings per share of $2.90-$2.95 for
fiscal 2014. The Zacks Consensus estimate is pegged at $2.96 per
However, the company has projected gross margins for the first
quarter of fiscal 2014 will fall at a higher rate than the fourth
quarter of fiscal 2013. Also, operating expenses for the first
quarter are expected to remain flat year over year.
March has been challenging for the retailers. Apart from Gap,
sports-related teen apparel,
), also reported a 2.9% decline in comps for the five weeks ended
Apr 5, 2014, compared with a comps increase of 2.1% for the five
weeks ended Apr 6, 2013. Further,
The Buckle, Inc
L Brands, Inc.
) reported a year-over-year decline of 1.8% and 1%, respectively,
in comps for the five-week period ended April 5, 2014.
Gap currently carries a Zacks Rank #3 (Hold) and is scheduled to
release its sales results for April 2014 on May 8, 2014.