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Gap Climbs After Better Than Expected September Sales

Analysts had projected growth of less than 1 percent, according to Retail Metrics. The figure fell 3 percent companywide in September, less than the 3.6 percent analysts estimated.
Source: Gap
By
  • Bloomberg

SAN FRANCISCO, United StatesGap Inc. shares rose as much as 6.7 percent in late trading after its September sales were a bit better than expected, boosted by a rebound at its Old Navy chain.

Same-store sales gained 4 percent at Old Navy last month, the San Francisco-based retailer said on Thursday. Analysts had projected growth of less than 1 percent, according to Retail Metrics. The figure fell 3 percent companywide in September, less than the 3.6 percent analysts estimated.

The stock climbed as high as $24.30 in late trading after the results were released. It had been down 7.8 percent this year through Thursday’s close.

Gap pointed to an improved product selection at Old Navy for helping drive growth at the brand — the company's lower-budget chain. Still, its other two major divisions remain in a slump. Same-store sales fell 10 percent at the Gap in September and 9 percent at Banana Republic.

“While we remain focused on performance across the portfolio, we are pleased to see a strong customer response to Old Navy’s product assortment,” chief financial officer Sabrina Simmons said in the statement.

A fire at Gap’s distribution center in Fishkill, New York, also is disrupting sales. The blaze, which struck in August, hurt comparable sales by about 3 percent in September. And the company expects a similar impact in October. The fire forced Gap to reroute deliveries and boost staff at other facilities.

By Nick Turner; editor: Mark Schoifet.

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