Gap sales slump in May, miss Street forecast

SAN FRANCISCO (AP) — Gap Inc. said Thursday that its same-store sales fell 6 percent in May, a worse than expected decline.

Analysts predicted a same-store sales decline of 5 percent, according to a Thomson Reuters survey.

Same-store sales, or sales at stores open at least a year, are a key indicator of retailer performance since they measure growth at existing stores rather than newly opened ones.

The San Francisco-based retailer, whose brands include its namesake Gap stores, Old Navy, and Banana Republic, said overall sales for the four weeks ending May 30 were $1.03 billion, down 5 percent.

Same store sales for the period at all the company's divisions fell short of expectations.

At Gap's North American stores, comparable sales were down 11 percent, compared to an expected 9.7 percent decline. Sales at the Banana Republic brand sank 14 percent, versus an expected 11.9 percent decrease.

Same-store sales in the international division fell 7 percent, compared to an expected decline of 4 percent.

Only Old Navy, the company's discount clothing chain, posted same-store sales growth of 3 percent. Still, that was less than the expected 3.9 percent gain.

"While sales results were mixed across divisions, we're pleased that merchandise margins were in-line with last year," Gap Chief Financial Officer Sabrina Simmons told investors in a statement. "Moving forward, we continue to focus our efforts on improving product assortments and making targeted investments to drive traffic to our stores."

Year-to-date same-store sales fell 7 percent while net sales fell 7 percent to $4.16 billion