Collins Stewart Starts Gap, Inc. (GPS) at Sell; Estimate SSS Declines Across All Core Segments in Q4 and FY11
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Price: $24.55 --0%
Rating Summary:
14 Buy, 23 Hold, 3 Sell
Rating Trend:
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Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
14 Buy, 23 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Collins Stewart initiates coverage on Gap, Inc. (NYSE: GPS) with a Sell. PT $17.00.
Collins analyst says, "Gap continues to deal with fashion issues, specifically within women’s apparel, which has led to consolidated SSS declines in all but two months in FY11. Management has repeatedly commented that turning around the women’s category remains a top priority, but we have yet to see meaningful improvement in fashion. We believe GPS will be hardpressed to sustain a SSS recovery without a significant improvement in its women’s line. Gap North America’s troubles appear deeply rooted, as the segment has recorded SSS declines in 25 out of the last 27 quarters, and the brand still lacks a lead designer. At the same time, the company is combatting significant product cost inflation, namely cotton, which we estimate will pressure gross margin through H1:12. We believe a Sell rating is warranted, given the ongoing fashion issues and near-term margin pressure."
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 $17.76 yesterday.
Collins analyst says, "Gap continues to deal with fashion issues, specifically within women’s apparel, which has led to consolidated SSS declines in all but two months in FY11. Management has repeatedly commented that turning around the women’s category remains a top priority, but we have yet to see meaningful improvement in fashion. We believe GPS will be hardpressed to sustain a SSS recovery without a significant improvement in its women’s line. Gap North America’s troubles appear deeply rooted, as the segment has recorded SSS declines in 25 out of the last 27 quarters, and the brand still lacks a lead designer. At the same time, the company is combatting significant product cost inflation, namely cotton, which we estimate will pressure gross margin through H1:12. We believe a Sell rating is warranted, given the ongoing fashion issues and near-term margin pressure."
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 $17.76 yesterday.
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