Chain Stores Come Up Short

At the company's best performer, Banana Republic, same-store sales fell 2% against estimates for a 2.6% gain. At Gap's namesake, same-store sales dropped 10%, far greater than analysts' expectation of a 3.9% decline. And at Old Navy, same-store sales fell by 8%, compared with Wall Street's prediction for a 7.3% decline.

Sabrina Simmons, vice president for finance at Gap, tried to put a positive spin on September's results.

"Our merchandise margins in September were in line with last year and we are comfortable with our inventory levels, which we continue to manage tightly heading into the important holiday season," she said.

Limited Brands(LTD) said same-store sales fell 4% while analysts had estimated a 1.5% decline. The company said it now expects third-quarter earnings ranging from break-even to 4 cents a share, compared with its prior forecast for a profit of 4 cents a share.

At Ann Taylor(ANN), which lately had been a laggard, same-store sales increased slightly in September, inching up 0.5% vs. analysts' estimates for a 1.5% drop.

Among teen retailers, Aeropostale (ARO)posted a 1.3% gain in same-store sales, beating analysts' estimates of a 0.7% drop. The company also reiterated its third-quarter earnings guidance of 43 cents to 45 per share.

But at Abercrombie & Fitch(ANAF), same-store sales fell 4%, well worse than estimates for a 1.4% decline.

Abercrombie's disappointing numbers joined those from American Eagle(AEO), which on Wednesday posted a same-store sales decline of 2% and cut its third-quarter earnings projection.

>To order reprints of this article, click here: Reprints