Dive Brief:

• Gap Inc. shares suffered Monday, down 4.4% in late trading after the company reported that revenue and same-store sales fell for July and the second quarter as a whole. July same-store sales were down 4%, and Q2 same-store sales fell 2%, beating the FactSet consensus expectations of a 2.7% decline but missing Retail Metrics' forecast. 

• Gap's July net sales were $1.10 billion, compared to net sales of $1.12 billion in the comparable period last year. Q2 net sales were $3.85 billion, down compared to $3.90 billion for the second quarter last year, but better than the FactSet consensus of $3.77 billion. 

• The Old Navy brand has regained its footing as the unit that buoys Gap’s results: Q2 same-store sales were down 3% at the flagship Gap brand, down 9% at Banana Republic, but flat at Old Navy, the company said.

Dive Insight:

Gap’s July report was its 15th negative monthly report in the past 16 months, the longest stretch of weak comps since a 22-month stretch in 2008-2009, according to research firm Retail Metrics. This is not the monthly or quarterly reporting that analysts have been looking for in Gap, a once iconic American apparel retailer that has failed to regain favor with consumers. 

The company reported relatively upbeat June results, but analysts remained wary; July’s disappointment reveals why. But Gap CFO Sabrina Simmons remains optimistic. “While performance varied during the quarter, we made progress on our streamlining initiatives and continued to see signs of improvement in our larger brands,” Simmons said in a statement.

It was a tough month all around in retail, analyst Ken Perkins at Retail Metrics noted to clients after the results, adding that sinking sales could be attributed to hot weather that sent shoppers to the beach, Amazon’s Prime Day, and the distraction of Pokemon Go.

Gap CEO Art Peck has been pursuing a turnaround since he took the post in 2014. While the comeback is taking longer than anyone expected, there are signs of life.

“Looking to Gap and Banana Republic, we continue to see improvement in the assortments,” Guggenheim’s Howard Tubin wrote last month. “Gap’s assortment includes more variety from a color, pattern, silhouette and trend perspective, while Banana Republic is delivering more commercially friendly patterns and key item offerings. Despite the improvement in comps and updated assortments, we remain on the sidelines with regards to the shares until we determine that this improvement is sustainable.”