Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
So what: Gap, which had been expected by Wall Street to post a 1.4% same-store sales decline, posted a 4% comparable-store sales rise, aided by a 12% sales jump in Banana Republic versus a 4% decline last year. Gap's weak segment continues to be its international sales, which contracted by 9% in February.
Now what: Before you get too excited, you should know that this was Gap's first positive same-store comps since June and, as I said earlier, even a blind squirrel has to find a nut once in a while. The weather couldn't have been more conducive to Gap's sales, but I still don't feel it has the product that consumers want.
In addition, it isn't like Gap was the only retailer to benefit from warmer weather. Limited Brands' (NYSE: LTD ) same-store sales rose 8% versus the Street's 6.2% estimate. Macy's (NYSE: M ) same-store sales popped 4.6% versus the 3.5% consensus. Target's (NYSE: TGT ) February same-store sales rose 7% versus the 5.2% expectation. TJX (NYSE: TJX ) crushed expectations with a 9% same-store sales jump versus projections of 7%. I stand by my assessment that Gap is my choice as one of the worst stocks in the S&P 500 and am definitely not a buyer here after its anomalously good report.
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