NEW YORK(AP)_ Gap Inc. reported Wednesday that same-store sales in September were down 8 percent, with the San Francisco-based retailer suffering from inventory backlog at its Old Navy Chain and lower profit margins after marking down merchandise.

Heidi Kuntz, Gap's chief financial officer, said she expects October to be ``a big clearance month'' and that margins will be a ``pivotal factor'' in the earning outcome for the quarter.

Millard Drexler, president and chief executive officer, said that the business continues to be ``challenging in a difficult apparel retail environment.''

``Strong marketing and merchandising campaigns for holiday continue be a priority,'' he said. ``We are making appropriate management changes to ensure we have the best talent to lead the business forward.''

For the five-week period, ended September 30, total sales were up 12 percent, reaching $1.12 billion.

The September results, which came in below company's expectations, is yet another blow to the company, which has issued profit warnings over the past year.

Gap's shares were down 12.5 cents, or 0.63 percent, to $19.88 in regular trading Wednesday on the New York Stock Exchange. The sales announcement came after markets were close.

As of Sept. 30, Gap Inc. operated 3,463 stores.