Apparel retailer Gap faced a smaller-than-expected drop in quarterly sales, largely due to higher customer visits to its Old Navy stores in June. Comparable sales at Old Navy, a bright spot in recent years, were flat after two-quarters of declines. Analysts had expected a decline of 1.20 per cent. Gap also estimated adjusted profit of 58 to 59 cents per share for the second quarter ended July 30. Analysts were expecting a profit of 48 cents.
The company saw higher traffic to its stores in June. Sales at established stores fell two per cent in the latest quarter. Analysts had expected a decline of 2.60 per cent. The company plans to focus on North America and shut 75 Old Navy and Banana Republic stores outside the region.
Mall traffic has also steadily decreased as millennials have taken to the internet to shop for apparel and accessories. Comparable sales at Banana Republic stores fell nine per cent, the sixth straight quarter of decline. The company's net sales fell 1.3 per cent.
US apparel retailers are struggling to draw shoppers who are increasingly seeking steep discounts and are choosing cheaper and trendier clothes offered by fast-fashion retailers.
