Wedbush Comments on Gap (GPS) June Sales; Analyst Says Risks Will Linger into H2
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Wedbush maintained a Neutral rating on Gap, Inc. (NYSE: GPS) with a price target of $44. Comments follow June sales numbers.
Analyst Morry Brown"GPS’s -2% comp for June fell short of consensus estimates for a +0.7% increase, in a month that most peers (3 of the other 4 monthly reporters) beat consensus. Gap’s -7% comp came in well below consensus of -0.7%. BR also comped -7% versus consensus of +2.3%. Old Navy was the lone bright spot, with a +7% comp against a +0.1% consensus forecast."
"Sales at Gap slowed meaningfully, as the -7% comp was a 400 bps deceleration from May, or 700 bps on a two-year stack basis. In addition to poor merchandise execution, executives believe timing of website clearance activity (which was started a week after the company began messaging sales in stores) also held back sales. We are focused on the merchandising challenges, and June results reinforce our concern there is risk that current issues linger into 2H," added the analyst.
Shares of Gap, Inc. closed at $40.97 yesterday.
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