San Francisco, CA - Shares of Gap Inc. (NYSE: GPS) dropped on Wall Street after the bell after the apparel retailer said it same-store sales for the month of December plunged by as much as 14 percent, worst than the analysts expectations.

The market analysts on Wall Street expected the company to post December same-store sales, or sales at stores open for at least one year, by dropping by 9.3 percent.

The company has been struggling in the last few quarters as the consumers cut back on their spending. Retailers have reported weakening sales and shrinking shoppers despite price discounts.

Same-store sales are considered as a key indicator of retailer performance as they sales measure growth at existing stores opened for at least one year rather than newly opened apparel stores.

Total sales were $1.93 billion for the five-week period ended Jan. 3, 2009, which represents a 12 percent decline compared with net sales of $2.20 billion for the five-week period ended a year earlier.

“December was challenging, as customers waited until late in the month to shop and we faced a highly competitive promotional environment,” Sabrina Simmons, chief financial officer of Gap, said in a statement on Thursday.

Simmons added, “We responded aggressively across our brands with compelling offers, which helped us clear through a significant amount of holiday inventory, but resulted in merchandise margins below last year.”

Same-store sales by division for December including Gap North America with a drop of 12 percent against a decline of 9 percent last year; Banana Republic North America drop 15 percent versus decrease of 1 percent in 2007; Old Navy North America down by 16 percent from 8 percent drop last year.

Same-store sales in international segment also declined by 5 percent compared to a decrease of 1 percent in the same period last year

The San Francisco, California-based retailer said it now expects full-year fiscal 2008 earnings to range between $1.27 per share to $1.30 per share, which is lower than its previous projection of $1.30 per share to $1.35 per share for the same period.

The company's fiscal year 2007 earnings totaled at $1.05 per share.

Shares of the retailer was moving down by as much as 52 cents or 3.83 percent to$13.04 in early trading session on Thursday, after closing lower by 68 cents or 4.78 percent to $13.56 in New York Stock Exchange composite trading yesterday.