Is Gap stumbling again?

<> on October 13, 2011 in Chicago, Illinois.
Photo: Scott Olson/Getty Images

Looks like Gap’s turnaround may have stalled.

Gap (GPS) reported disappointing June sales at its namesake and Banana Republic stores, thwarting investors’ hopes that the retailer was on the right track again after a promising start in May to the quarter.

Comparable sales at Gap and Banana Republic slipped 7% last month, while those at low-priced chain Old Navy, Gap’s biggest business, rose 7%. Companywide comp sales were down 2%, missing analysts’ estimates for a 0.8% gain by a wide margin, according to Thomson Reuters data.

The company’s comparable sales in the first quarter, which ended in early May, fell for the first time in 3 years.

But at the time, CEO Glenn Murphy spoke of fashion missteps in the spring, of poor liquidation of excess inventory and poor marketing efforts. He also presented his remedy for putting the company back on track: he predicted that Banana Republic’s women’s business would get a lift once the merchandise overseen by Marissa Webb, the creative director he hired in April, hit stores. He also predicted that Gap, which he acknowledged “still has work to do” would do better in August once it moves to a global merchandising and promotion campaign, rather than by market. Old Navy apparently got a lift from the relaunch of its web site and an ad campaign aimed at emphasizing what a bargain it is to shop there.

He also said that “Gap is headed in the right direction.” He must be hoping that June was just a temporary blip.

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