Gap January same-store sales fall 2 percent

NEW YORK (Reuters) - Gap Inc. (GPS.N) said on Thursday that sales fell 2 percent in January at stores open at least a year as it focused on clearing out holiday merchandise to make room for spring clothing.

Analysts, on average, had been expecting the San Francisco-based clothing retailer to post a same-stores sales decrease of 6.1 percent, according to Reuters Estimates.

Gap, which runs Banana Republic, Old Navy and its namesake Gap stores, said net sales for the four-week period ended February 2 fell to $932 million from $1.19 billion a year ago.

Same-store sales, a key gauge of retail performance, fell 4 percent and 3 percent, respectively, at Gap and Old Navy stores in North America. They rose 5 percent at Banana Republic, the company's more upscale chain.

The company said fourth-quarter sales fell to $4.67 billion from $4.92 billion a year ago.

Looking ahead, Gap said it expects fourth-quarter earnings to range between 33 cents and 35 cents a share, including a 1 cent benefit from favorable tax rate adjustments.

The company also raised its full-year earnings outlook to a range of $1.03 and $1.05 per share, from a prior forecast of 92 cents to 98 cents a share.

Analysts, on average, had expected fourth-quarter earnings of 29 cents a share, and full-year earnings of $1.04 a share, according to Reuters Estimates.

Gap is in the midst of a turnaround to lure back shoppers who defected to other retailers over the last few years. Its Gap and Old Navy stores -- whose competition includes Target Corp (TGT.N), Kohl's Corp (KSS.N) and Abercrombie & Fitch (ANF.N) -- have been hit the hardest.

(Reporting by Justin Grant and Brad Dorfman, editing by Dave Zimmerman)