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Gap Same-Store Sales Decline in Q2

Gap Inc. can’t catch a break.

The San Francisco-based operator of Gap, Old Navy and Banana Republic said Monday that net sales fell to $1.10 billion in the month ended July 30, compared to $1.12 billion last year. A disappointing monthly performance that contributed to net sales in the second quarter declining from $3.9 billion to $3.85 billion.

The retailer’s stock (GPS) was down as much as 6.32% in Tuesday morning trading. It’s down 2.96% year-to-date.

“While performance varied during the quarter, we made progress on our streamlining initiatives and continued to see signs of improvement in our larger brands,” chief financial officer Sabrina Simmons, said.

Comparable sales fell 4 percent in July and were down 2 percent in the quarter. After ending its months-long losing streak in June, Old Navy comps were flat last month and in Q2. Gap fared a little less badly than the year-ago period, posting a 4 percent decrease in July (versus negative 7 percent) and a 3 percent decline in the quarter (versus negative 6 percent). Banana Republic missed the mark again—July comps were down 14 percent, compared to a 10 percent decrease last year, to end the quarter down 9 percent, worse than Q2 2015’s 4 percent decline.

“Unfavorable weather, soft traffic trends and uninspiring product assortments contributed to the disappointing results,” Stifel analysts wrote in a note to clients. “The prolonged underperformance at the Gap businesses, despite management’s best efforts, has undermined our confidence and limited our visibility for improvement.”

Gap expects its diluted earnings per share for the second quarter to be in the range of 30 cents to 31 cents.