Gap (GPS) Nov. Comps Beat but Margin Doubts Linger
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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: 14 | Down: 24 | New: 9
Rating Summary:
14 Buy, 23 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 14 | Down: 24 | New: 9
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On Thursday, Gap, Inc. (NYSE: GPS) reported November comps that topped estimates, up 2% vs 0.7% expected. Despite this, shares traded lower on concerns about margins.
Analyst Laura Champine of Canaccord Genuity explained.
"The company turned in a better-than-expected performance despite weaker retail traffic and a later Thanksgiving that negatively impacted other apparel retailers such as L Brands (LB: NYSE). We think this suggests greater promotional activity likely drove sales for GPS given the challenging climate."
"We expect flat Q4 SSS on top of flat, versus our prior outlook of a 1% decline. This pushes our Q4 EPS estimate one penny higher to $0.61. We continue to project yr./yr. gross margin contraction of 190bps on elevated promotions," she added.
Canaccord Genuity has a Hold rating on Gap, Inc. with a price target of $43.00
For an analyst ratings summary and ratings history on Gap, Inc. (NYSE: GPS) click here. For more ratings news on Gap, Inc. click here.
Shares of Gap, Inc. closed at $40.24 yesterday.
Analyst Laura Champine of Canaccord Genuity explained.
"The company turned in a better-than-expected performance despite weaker retail traffic and a later Thanksgiving that negatively impacted other apparel retailers such as L Brands (LB: NYSE). We think this suggests greater promotional activity likely drove sales for GPS given the challenging climate."
"We expect flat Q4 SSS on top of flat, versus our prior outlook of a 1% decline. This pushes our Q4 EPS estimate one penny higher to $0.61. We continue to project yr./yr. gross margin contraction of 190bps on elevated promotions," she added.
Canaccord Genuity has a Hold rating on Gap, Inc. with a price target of $43.00
For an analyst ratings summary and ratings history on Gap, Inc. (NYSE: GPS) click here. For more ratings news on Gap, Inc. click here.
Shares of Gap, Inc. closed at $40.24 yesterday.
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