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Nov 10, 2019

Gap (GPS, $16.68) slashes full-year earnings forecast; announces CEO Art Peck's departure

Gap Inc. lowered its full-year earnings outlook. Additionally, it revealed that CEO Art Peck would be stepping down.

For the third quarter, the clothing retail giant’s same-store-sales declined -4%, including a -7% plunge in the Gap banner, a -3% decline in Banana Republic, and a -4% reduction in Old Navy same-store sales.

Adjusted earnings for the quarter are expected to be 50 to 52 cents, compared to the FactSet consensus estimate of 51 cents.

Gap’s latest  full-year adjusted earnings guidance is in the range of $1.70 to $1.75 per share – much lower than its prior forecast of $2.05 to $2.15 per share. The FactSet consensus estimate is $1.86 per share.

CFO Teri List-Stoll cited macro impacts and slower traffic as additional headwinds to results that have been affected by “product and operating challenges across key brands”.

Separately, Gap announced that Art Peck is leaving the company. Under Peck’s leadership, the retailer planned to close more than half of its Gap-branded stores and spin off its Old Navy division into a standalone business by 2020. Peck has led the group since 2015. He will be replaced by board chairman Robert Fisher, a member of the company's founding family. 

Related Ticker: GPS

GPS in upward trend: price expected to rise as it breaks its lower Bollinger Band on May 22, 2024

GPS may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options. In of 38 cases where GPS's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued upward trend are .

Price Prediction Chart

Technical Analysis (Indicators)

Bullish Trend Analysis

The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where GPS's RSI Oscillator exited the oversold zone, of 24 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .

The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 5 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.

Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where GPS advanced for three days, in of 299 cases, the price rose further within the following month. The odds of a continued upward trend are .

Bearish Trend Analysis

The Momentum Indicator moved below the 0 level on May 20, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on GPS as a result. In of 84 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .

The Moving Average Convergence Divergence Histogram (MACD) for GPS turned negative on May 22, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 53 similar instances when the indicator turned negative. In of the 53 cases the stock turned lower in the days that followed. This puts the odds of success at .

GPS moved below its 50-day moving average on May 10, 2024 date and that indicates a change from an upward trend to a downward trend.

The 10-day moving average for GPS crossed bearishly below the 50-day moving average on April 19, 2024. This indicates that the trend has shifted lower and could be considered a sell signal. In of 15 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .

Following a 3-day decline, the stock is projected to fall further. Considering past instances where GPS declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .

The Aroon Indicator for GPS entered a downward trend on May 06, 2024. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.

Fundamental Analysis (Ratings)

Fear & Greed

The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (3.922) is normal, around the industry mean (3.930). P/E Ratio (20.336) is within average values for comparable stocks, (102.859). Projected Growth (PEG Ratio) (1.003) is also within normal values, averaging (1.444). Dividend Yield (0.022) settles around the average of (0.027) among similar stocks. P/S Ratio (0.688) is also within normal values, averaging (2.038).

The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. GPS’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. GPS’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 77, placing this stock worse than average.

Notable companies

The most notable companies in this group are TJX Companies (NYSE:TJX), lululemon athletica (NASDAQ:LULU), Gap (The) (NYSE:GPS), Abercrombie & Fitch Co (NYSE:ANF), Foot Locker (NYSE:FL), Guess (NYSE:GES), Stitch Fix (NASDAQ:SFIX).

Industry description

Companies in the apparel and/or footwear retail industry sell clothing, accessories and footwear, for different age groups and genders. The industry’s product categories could range from basics, such as underwear, to luxury items. Some retailers source items from wholesalers or an apparel brand to sell in their stores; some others are licensed to make and market their own retail goods under particular brands. Several companies outsource production of clothing to developing/emerging economies where labor costs are relatively inexpensive. Apparel retail is often influenced by fashion trends, and many companies feel the need to adapt to what’s “in vogue” to retain customers and attract new ones. A major disruption in this industry has been the burgeoning trend in digital shopping – to compete with rapidly growing e-commerce, even traditional retail players are upping the ante on their online platforms. Much of the products’ performance in apparel/footwear retail is cyclical, i.e., economic boom times encourage consumer spending, while recessions induce thriftiness among people. Some large-cap U.S. apparel/footwear retail companies include TJX Companies Inc., Ross Stores, Inc., Lululemon Athletica Inc. and Burlington Stores, Inc.

Market Cap

The average market capitalization across the Apparel/Footwear Retail Industry is 12.67B. The market cap for tickers in the group ranges from 256K to 119.4B. IDEXY holds the highest valuation in this group at 119.4B. The lowest valued company is DESTQ at 256K.

High and low price notable news

The average weekly price growth across all stocks in the Apparel/Footwear Retail Industry was -1%. For the same Industry, the average monthly price growth was 9%, and the average quarterly price growth was 92%. ESHDF experienced the highest price growth at 19%, while DBGI experienced the biggest fall at -28%.

Volume

The average weekly volume growth across all stocks in the Apparel/Footwear Retail Industry was 22%. For the same stocks of the Industry, the average monthly volume growth was 16% and the average quarterly volume growth was 110%

Fundamental Analysis Ratings

The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows

Valuation Rating: 53
P/E Growth Rating: 44
Price Growth Rating: 55
SMR Rating: 65
Profit Risk Rating: 76
Seasonality Score: 13 (-100 ... +100)
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General Information

an operator of stores that retail clothing, accessories and personal care products

Industry ApparelFootwearRetail

Profile
Fundamentals
Details
Industry
Apparel Or Footwear Retail
Address
Two Folsom Street
Phone
+1 415 427-0100
Employees
85000
Web
https://www.gapinc.com
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