Gap June sales top estimates as traffic improves at Old Navy

Bloomberg

Gap Inc, the biggest US apparel-focused retailer, posted June sales that topped analysts’ estimates, a sign the company’s long-promised turnaround could be taking hold.
Total same-store sales, a key benchmark, rose 2 percent in June, the San Francisco-based retailer said in a statement.
Analysts had predicted a 3.6 percent decline, according to estimates compiled by Retail Metrics. The company’s off-price Old Navy brand led the results, with comparable sales increasing 5 percent last month, topping the 3.3 percent drop analysts expected.
Chief Executive Officer Art Peck’s effort to deliver a turnaround has been slower than expected. But the June results could signal that the improvement he predicted would arrive in the spring is beginning to materialise. Traffic was bolstered by the Memorial Day holiday, which fell in fiscal June, the company said.
Trends reversed for Old Navy, which had stumbled as comparable sales slipped in six of the past eight months. In May, the company said it was shutting Japanese Old Navy stores and refocusing on North America and China.
The shares rose as much as 6.6 percent to US$23.05 in New York, the biggest intraday gain since November. The stock had fallen 12 percent this year through Thursday.
Comparable sales at the company’s flagship brand slipped 1 percent compared with the same period a year earlier. That’s less than the 2.7 percent decline analysts had predicted. Sales at Banana Republic fell 4 percent in June, compared with the 10.3 percent analysts had estimated.