Boston, MA 09/05/2014 (wallstreetpr) – According to recent reports, The Gap Inc. (NYSE:GPS) fell by 6% to $43.90 in the stock market after announcing below expectations same-store sales. The overall sales of GPS dropped by 6% compared to analysts projection of 0.4% in the month of August.
What’s The Probable Reason:
As per the reports, one of the main reasons of weak same-store sales of Gap Inc. (NYSE:GPS) is below average performance of its namesake clothing chain. The online sales and store sales of those stores that were in existence for at least a year declined 2% YOY. It couldn’t meet the expectations of market experts who predicted 1.7% gain during the period. Total sales of the company declined 6% although analysts predicted a 0.4% drop.
Glenn Murphy, CEO of The Gap Inc. (NYSE:GPS), is trying hard to maintain a decent sales growth in-spite of weak economic conditions. Due to change in the economic outlook, people are not ready to spend on latest products. As per the information given by Gap Inc. (NYSE:GPS), the below average August month sales performance of Old Navy stores, Piperlime website and its store chain will further decrease the margin of the company for the current month. According to Susan Anderson, Analyst at FBR & Co., the products offered by GPS are too basic to use. It has put negative impact on company’s sales in recent months. Ways to surge the sales are discounts and attractive offers. Experts claim that GPS should offer deep discounts on its products to increase sales in coming months.
The Gap Inc. (NYSE:GPS) has witnessed a decent growth this year in terms of share prices as shares of GPS have inclined by 19% this year. As soon as it announced its weak sales performance, the share prices went down by nearly 6% towards the end of the day on Wednesday. The best performance from its side came when old Navy Chain posted 2% gain in the last month’s sales, but it missed the analyst’s expectations of 3.6% growth in sales.