There were some bright spots in retailers' releases of June sales data, but Gap (NYSE:GPS) wasn't really one of them. Oh, to be Zumiez (NASDAQ:ZUMZ), with its impressive June sales, or maybe even Wal-Mart (NYSE:WMT), which exceeded expectations. (Seth Jayson commented here.) But Gap's month didn't give much reason for inspiration.
Gap said its same-store sales in June fell by 5%, which was slightly below the 4.2% drop in the consensus estimate. Total sales weren't too inspiring either, having decreased 4% to $1.45 billion. The core Gap concept and Old Navy were particularly weak. For a bit of added perspective, Gap's same-store sales declined by 6% in June of last year.
In the company's press release, a Gap spokesperson said that June was a "transitional" month and that its brands "made progress clearing through summer merchandise." That's good, because I'm pretty sure Gap investors don't want to see too many markdowns to move last season's goods out the door at a later date.
Transitional seems like a logical description; Gap still has its work cut out for it in getting its brand back on track, wooing its core customers, and generating a little excitement for its wares. Although there's no reason to trade irrationally on one month's sales news, comps data certainly can help investors gauge how a company is progressing. Gap still seems to have a lot of work to do, as has been the case for quite some time.
It's certainly no secret that Gap still hasn't filled its CEO position. I've seen that mentioned in many media articles, and that's a legitimate ongoing concern. However, maybe Gap shouldn't rush things. Getting the right type of CEO on the job, even if it means taking its time filling the position, seems prudent to me.
Of course, I still don't think Gap looks appealing enough to put on my to-buy list just yet -- like I said at the open, there doesn't appear to be much to be inspired about at the moment. I know many people are still enamored of the company's balance sheet, but at the same time, I'd like to see signs that the turnaround is well under way. However, it looks like anybody who's waiting for significant signs of change will have to wait a bit longer.
For related Foolishness, please see:
- Can Gap gain some cred through a new credit card?
- Last quarter felt like same story, different day at Gap.
- Back in April, I wondered if white shirts could save Gap.
Gap and Wal-Mart are both Motley Fool Inside Value recommendations. Gap has also been recommended in Stock Advisor. Zumiez is a Motley Fool Hidden Gems pick.
Alyce Lomax does not own shares of any of the companies mentioned.
