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Gap Missed Estimates by $0.04, Stock Fell after Hours

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Updated

Series snapshot

The San Francisco–based Gap (GPS) reported its first-quarter results after the market closed yesterday. The quarter ended on May 5.

The fashion retailer once again did better than Wall Street revenue expectations but fell short of bottom-line forecasts. Total sales increased 10% YoY (year-over-year) to $3.78 billion, which was $172 million more than the consensus. Earnings per share rose 16.7% YoY to $0.44 but were below analysts’ expectations of a 27.8% YoY jump to $0.46.

For more details about the first quarter’s performance, see parts two and three of this series.

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Stock performance

Investors were disappointed with Gap’s first-quarter results, and we saw the impact in the extended trading session yesterday, as Gap’s stock plunged around 7.5%. The company was sitting at a year-to-date loss of 3% as of yesterday’s close. The earnings miss might put more pressure on the stock today.

Analysts lowered Gap’s price target after the results, including Deutsche Bank (from $34 to $33), Jefferies (from $48 to $45), J.P. Morgan (from $30 to $29), and Credit Suisse (from $35 to $33).

Wall Street now has an average price target of $33.03 set on Gap. The company closed Wednesday at $32.95.

About Gap

Gap is a global apparel retail company that sells apparel, accessories, and personal care products in more than 90 countries. The company’s portfolio of brands includes Gap, Banana Republic, Old Navy, and Athleta. It operates through 3,200 company-operated stores, 450 franchise stores, and e-commerce sites. The First Trust Consumer Discretionary AlphaDEX Fund (FXD) invests 1.1% of its portfolio in the company.

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