It’s a testament to how bad a company is doing when one small bit of good news is enough to sends stocks flying, but that’s just what happened Monday when Gap Inc. reported its third quarter earnings.
The company revealed that same-store sales fell 1 percent during the month of October, the tenth time in 11 months. That was slightly better than the 2 percent drop analysts had predicted, and it was enough to send shares of Gap Inc. up by nearly 5 percent on Monday.
What encouraged investors was that same-store sales could have been in the positive if not for a fire that struck Gap’s Fishkill, NY distribution center in August, which the retailer said hampered sales by as much as 3 percent. The good news was also bolstered by positive movement at Old Navy, where sales were up by 3 percent after a flat Q2.
Still, this bright spot wasn’t enough to mask continued issues at the beleaguered brand, which reported a 7 percent sales decline at its core Gap business for the month of October. Banana Republic fared little better, with sales slipping 4 percent, the twentieth straight month of sagging sales.
The bad news comes just a week after the company reported its chief financial officer Sabrina Simmons would be leaving her post at the end of the current fiscal year.