March Proves to Be Another Bad Month for Gap Sales

Gap said that the net sales were $1.51 billion for the five-week period ended April 5, 2014. While there is a shift around Easter from 2013 to 2014 in the month’s timing, Gap said that its comparable sales (same-store) were down 6% in March, versus a 1% decrease in 2013.

The company said that it now expects gross margins for its first quarter to be below the prior year by more than the year-over-year decline seen in the fourth quarter of fiscal year 2013. In addition, given ongoing expense management, the company expects first quarter fiscal year 2014 operating expenses to be flat to last year.

Again, February was bad — and March is close to rivaling it. These are the following brand reports for March of 2014 versus March of 2013, and ALL are negative numbers and listed as global numbers:

• Gap was negative 7 percent versus flat last year
• Banana Republic was negative 4 percent versus positive 1 percent last year
• Old Navy was negative 7 percent versus negative 2 percent last year.

The company was even less forthcoming about the “why” than it was last month. Chairman and CEO Glenn Murphy simply said:

While March performance has been challenging, we remain confident in the opportunities ahead. We are pleased to reaffirm our full-year EPS guidance range.

Gap shares closed down 1.75% in normal trading on Thursday at $39.28, and shares were indicated lower after the report of lower same-store sales and lower margins.