FBR Capital Maintains Market Perform on Gap, Inc. (GPS) Following an August SSS Preview

FBR Capital maintained a Market Perform rating and $35.00 price target on Gap, Inc. (NYSE: GPS) following an August SSS Preview. FBR Capital is lowering August GPS SSS estimates to –0.2% (from +0.1% prior), versus consensus of –0.3% and –2% LY. Analyst Susan Anderson assumes slightly lower Gap SSS, reflecting light traffic at Gap Adult and an observed clearance build.

Anderson commented, "We slightly lower our August GPS SSS estimate to –0.2% (from +0.1% prior), versus consensus of –0.3% and –2% LY (note that this is the first month in '15 without port impacts embedded). We assume slightly lower Gap SSS, reflecting light traffic at Gap Adult and an observed clearance build. Overall apparel traffic picked up at the beginning of the month, reflecting the shift of tax-free days into August from July LY. However, the benefit was likely mostly offset by the shift of Labor Day weekend into September. ON appeared to perform well for BTS, but we did observe elevated clearance levels and an incremental x30% off clearance for every week, which could pressure AUR (possible crowding out of Missy spend with BTS or a continuation of hangover from light-traffic July). August AUR could benefit from the shift of Gap/BR Labor Day promos into Sept., but we believe that underlying pressure continues, ex. shifts, and we look for more clarity on ON performance in the month."

For an analyst ratings summary and ratings history on Gap, Inc. click here. For more ratings news on Gap, Inc. click here.

Shares of Gap, Inc. closed at $32.81 yesterday.

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