Leading apparel retail chain,
), comparable store sales climbed 6% in September 2012 (five-week
period ended September 29, 2012) versus a 4% decline in the
comparable prior-year period. Moreover, net sales in September
totaled $1.45 billion, up 7.4% compared with the prior-year period
sales of $1.35 billion.
The rise in comps reflects the company's focus on delivering
trend-right products to customers, as well as a solid store
execution. During the period, the company registered strong demand
for its products across all brands.
August comps at Gap North America increased 5% against a 4%
decline recorded in the prior-year period. Banana Republic North
America's same-store sales were up 4% versus a 1% dip recorded in
September last year. Results at its Old Navy North America segment
reflected a robust 10% rise in comps compared with a 1% fall in the
prior-year period. On the flip side, comps at the International
business declined 3% in September, but were comparatively better
than the 13% decline recorded in the prior-year period.
Year-to-date through September 29, 2012, the company's net sales
increased 6% to $9.71 billion compared with $9.12 billion in the
prior-year period. Improvements in net sales were primarily driven
by 5% growth in the company's comps figure.
Gap is scheduled to release its October sales results on
November 1, 2012.
Concurrently, two of the company's competitors -
Ross Stores Inc.
) - reported improved same-store sales for the month of September.
Nordstrom recorded a 4.4% growth in September comps, while comps at
Ross increased 5%.
We believe the company's relentless focus on turnaround
strategies for improvising top line are paying off, which is
reflected in its solid comps and sales performance in recent
months. The company has posted positive comps for the last three
consecutive months (July, August and September), while comps were
flat in June and up in February, March and May. This reflects the
significant progress the company has made despite the poor comps
results in every month of fiscal 2011, with the exception of April
Further, Gap's long-term strategic moves, along with disciplined
cost management measures will not only provide financial
flexibility to the company, but also help it to reduce operating
expenses. Moreover, Gap's globally recognized brands complement one
another, enabling it to leverage its position in the sector.
Currently, Gap's shares maintain a Zacks #2 Rank, which
translates into a short-term Buy rating. Our long-term
recommendation on the stock remains 'Outperform'.
GAP INC (GPS): Free Stock Analysis Report
NORDSTROM INC (JWN): Free Stock Analysis Report
ROSS STORES (ROST): Free Stock Analysis Report
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