Gap Inc., the biggest U.S. apparel-focused retailer, posted June sales that topped analysts' estimates, a sign the company's long-promised turnaround could be taking hold.
Total same-store sales, a key benchmark, rose 2% in June, the San Francisco-based retailer said in a statement Thursday. Analysts had predicted a 3.6% decline, according to estimates compiled by Retail Metrics. The company's off-price Old Navy brand led the results, with comparable sales increasing 5% last month, topping the 3.3% drop analysts expected.
Chief Executive Officer Art Peck's effort to deliver a turnaround has been slower than expected. But the June results could signal that the improvement he predicted would arrive in the spring is beginning to materialize. Traffic was bolstered by the Memorial Day holiday, which fell in fiscal June, the company said.
Trends reversed for Old Navy, which had stumbled as comparable sales slipped in six of the past eight months. In May, the company said it was shutting Japanese Old Navy stores and refocusing on North America and China.
The shares rose as much as 6.6% to $23.05 in New York, the biggest intraday gain since November. The stock had fallen 12% this year through Thursday.
Comparable sales at the company's flagship brand slipped 1% compared with the same period a year earlier. That's less than the 2.7% decline analysts had predicted. Sales at Banana Republic fell 4% in June, compared with the 10.3% analysts had estimated.
-- Bloomberg News