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Gap and Its Struggle with Performance



Analysts’ 3Q15 expectations for Gap

Gap (GPS) is expected to release its fiscal 3Q15 earnings on November 19, 2015. Wall Street expects Gap’s adjusted EPS (earnings per share) to be around $0.63 for 3Q15. This is a decrease of 15.2% from 3Q14, which is in line with the company’s outlook of $0.62–$0.63.

The company has been witnessing a decline in its top-line growth, which has been a major reason for the drastic fall in its stock price over the year.

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Stock performance

Gap’s (GPS) declining top-line growth over the last one year has turned investors pessimistic about the future of the company. Gap stock has thus fallen by 36.0% over the last one year as of November 17, 2015.

Gap’s stock performance is the least compared to its peers in the apparel retail sector, including Ross Stores (ROST), L Brands (LB), TJX Companies (TJX), and Urban Outfitters (URBN), whose stocks have returned 13.9%, 20.0%, 10.6% and -24.0%, respectively.

About Gap

Gap (GPS) is a very well-known US-based multinational apparel retailer. It offers products in apparel, accessories, and personal care for men, women, and children. The company has brands like Gap, Banana Republic, Old Navy, Piperlime, Athleta, and Intermix under its banner. As of 2Q15, it operated its business through 3,309 company-operated stores around the globe, while also having its presence in online retail and franchise retail.

An investor wanting to invest in Gap (GPS) and other consumer discretionary companies can invest in the SPDR S&P Retail ETF (XRT).

In the next article, we’ll look at Gap’s top-line performance.


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