Gap's key sales metric up 2 percent in March, helped by surging Old Navy business

IndustriesAssociated Press

Gap Inc. reported a 2 percent increase in a key revenue metric for March as surging business at Old Navy offset sales declines at its namesake division and its Banana Republic stores.

The results, which were released after the regular markets closed on Thursday, beat estimates for a 0.6 percent increase in sales in stores open at least a year, according to Thompson Reuters. But the figure was compared to a 6 percent drop in the same year-ago period. Shares fell in after-hours trading.

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Revenue from stores open at least a year is considered a key indicator of retail performance because it strips away the impact of recently opened or closed stores.

The results underscore the challenges facing the company's CEO Art Peck, who took on the top role in February, succeeding Glenn Murphy who has been at the helm since 2007. Peck, a 10-year-veteran at the San Francisco-based retailer, had been its digital leader overseeing new innovations that cater to mobile-savvy shoppers.

"We are especially pleased with the strong customer response to Old Navy during this peak spring shopping month, and we remain focused on the steps necessary to drive improved product consistency across our entire portfolio," said Sabrina Simmons, Gap's chief financial officer in a statement.

By division, Gap's global same-store sales fell 7 percent, the 11th consecutive monthly decline. Banana Republic's global sales fell 3 percent. In comparison, Old Navy's same-store sales surged 14 percent from the year-ago period.

Gap Inc.'s total sales rose 1 percent to $1.53 billion for the five-week period ended April 4.

Gap's shares slipped 63 cents to $42.10 in after-hours trading Thursday. Shares rose 32 cents to $42.73 in regular trading.