Some additional comments relating to your earlier post. Looks like some other people are also wondering if this is a back-to-school sale.
All I know is that my daughter and her friends are sure trying to make the August comps favorable.
Thursday August 5, 7:08 pm Eastern Time
Gap shares drop 8 percent on lackluster July sales
(adds company comment, updates stock price, adds byline)
By Sarah Tippit
LOS ANGELES, Aug 5 (Reuters) - The stock of Gap Inc.(NYSE:GPS - news) dropped about 8 percent on Thursday after the casual clothing retailer reported a modest rise in same-store sales in July that fell short of analysts' expectations.
The stock of San Francisco-based Gap closed down $3.44 at $39.88 Thursday on the New York Stock Exchange.
Other retail stocks also were hit by soft July sales.
Kearney, Neb.-based teen apparel retailer Buckle Inc. (NYSE:BKE - news), fell $9.94, or more than a third, to $18.25 on the NYSE after it warned that second quarter earnings would not meet Wall Street expectations amid soft July sales.
Dayton Hudson Corp. (NYSE:DH - news), which owns Mervyn's and Target stores, dropped $2.50 to $58.71 on the NYSE after the retail giant reported that July same-store sales were at the low end of its plan for a modest increase.
The drop in Gap stock followed its announcement of a 22 percent rise in total sales to $696 million in July, but a 2 percent rise in same-store sales, or sales from stores open at least a year.
``The Street was expecting mid- to high-single-digit gains in same-store sales. Gap stores sales missed their plan,' said Maura Byrne Hunter, an analyst with Salomon Smith Barney.
Gap spokesman Warren Hashagen attributed the slump in July sales to deeper-than-expected markdowns at U.S. Gap stores. Retailers traditionally mark down items in July to clear them out and make room for fall merchandise.
``Our margin in the second quarter was not as strong and we had to be more promotional and had to move (the merchandise). July is where that culminates,' Hashagen said.
Hunter and other analysts said Gap had also made changes to the timing of its summertime advertising, which caused tough comparisons with July 1998.
``Last year, they had a very strong advertising halo because their ads ran late in June and carried over to July. This year that wasn't the case. They advertised earlier in June,' said Marcia Aaron, an analyst with Deutsche Banc Alex Brown.
There also were changes in the timing of the arrival of Gap's new fall line, the analysts said, which could have contributed to the July softness.
Whether Gap sales will pick up during the upcoming back- to-school season is the ``$64,000 question,' Aaron said, adding that, ``the early read on the fall season is good.'
As of July 31, Gap operated 2,611 stores in North America, Japan and Europe, compared with 2,272 at Aug. 1, 1998. |
