Analysts Like Gap's Old Navy December Comps

Gap Inc (NYSE: GPS) traded lower Friday on disappointing holiday sales, but a couple of analysts were pleased by the company's Old Navy outlets.

The apparel retailer said late Thursday that its Gap outlets grew December same-store sales 1 percent, while its Old Navy stores saw increased comps of 8 percent. Banana Republic same-store sales were flat.

Mizuho's Betty Chen said weak sales at Gap stores are explained by lackluster traffic coupled with deep discounting aimed at clearing inventory.

Old Navy, which represents 40 percent of Gap's total sales, saw strength in December lead by women's apparel.

Chen called Old Navy performance "impressive" and maintained a Buy rating on Gap and $45 target.

Gap in December named Jeffrey Kirwan, 48, president of its Gap unit and Andi Owen, 49 to head Banana Republic. In October, the company said Arthur Peck will succeed Chief Executive Glen K. Murphy, effective next month.

With its new CEO, Topeka's Dorothy S. Lakner expects Gap's 2015 will be "a better year."

Laker maintained a Buy rating and $50 target, citing "momentum" at Old Navy and "potential for upside" in Gap and Banana Republic.

Gap changed hands recently at $42.07, down 2.4 percent.