Net income for international clothing retailer Gap declined 19 per cent in its second quarter, according to results published today.
Trading rose two per cent year-on-year in the three months to July 30th 2011 but comparable international sales continued to struggle falling four per cent compared to the same period in 2010, when trading outside the US rose by three per cent.
Following the results, Gap reaffirmed its reduced guidance of $1.40 to $1.50 diluted earnings per share for the full financial year.
“Despite a difficult quarter, we still delivered a net sales improvement and I continue to believe we have far greater opportunities than challenges ahead of us,” said Glenn Murphy, Chairman & CEO of Gap.
“Every brand, division, and geography is focused on what matters most – delivering consistent, great product and more effective marketing in order to drive higher levels of performance.”
During the quarter Gap opened its third store in Shanghai, boosting its total outlets in China to six, and Asia is now by far the second largest market for the retailer behind Canada and then Europe.
Canada saw the smallest increase in net sales for any of its operating regions of just $2 million (£1.21 million), to $214 million, and European sales represent a greater share of business now with net sales for the period ending at $198 million.
Despite confirming store extensions in a number of its major US outlets and expecting to open 75 stores before the end of the year, Gap’s net square footage of company owned stores fell two per cent in Q2.