Comparable store sales for the leading apparel retail chain
), rose 9% in August 2012 (four-week period ended August 25, 2012)
versus a 6% decline in the comparable prior-year period. The rise
in comps reflects its focus on delivering trend-right products to
customers, as well as a solid store execution. Additionally, August
comps for this global fashion retailer benefited from a strong
back-to-school sale season, with exceptional results at Old Navy.
GAP INC (GPS): Free Stock Analysis Report
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Moreover, net sales in August totaled $1.20 billion, up 9.1%
compared with the prior-year period sales of $1.10 billion.
August comps at Gap North America spiked 9% against an 8% decline
recorded in the prior-year period. Banana Republic North America's
same-store sales were up 8% versus a 4% dip recorded in August last
year. Results at its Old Navy North America segment reflected a
robust 12% rise in comps compared with a 4% fall in the prior-year
period. On the flip side, comps at the International business
declined 2% in August, but were comparatively better that the 9%
decline recorded in the prior-year period.
Year-to-date through August 25, 2012, the company's net sales
increased 16% to $8.26 billion compared with $7.78 billion in the
prior-year period. Improvements in net sales were primarily driven
by 4% growth in the company's comps figure.
Gap is scheduled to release its September sales results on October
Concurrently, two of the company's competitors,
Ross Stores Inc.
), reported robust same-store sales for the month of August.
Nordstrom recorded an outstanding 21.0% growth in August comps,
while comps at Ross increased 8%.
We believe that 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 drive value
proposition. Moreover, Gap's globally recognized brands complement
one another, enabling it to leverage its position in the sector.
The company's relentless focus on trying to return to the growth
curve seems to be paying off, as evidenced by the solid comps and
sales performance in recent months. The company has been posting
positive comps for two consecutive months (July and August), while
comps were flat in June and up in 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
Currently, Gap's shares maintain a Zacks #1 Rank, which translates
into a short-term Strong Buy rating. Our long-term recommendation
on the stock remains Neutral.