Gap (GPS, $27.38) misses Q4 revenue expectations
Gap Inc. reported lower-than-expected revenue for the fourth quarter, as same-store sales plunged at its Gap and Banana Republic stores. However, the retail company beat earnings expectations.
Gap’s diluted earnings came in at 61 cents a share with revenue of $4.4 billion for the quarter. That includes 45 cents a share for non-recurring tax benefits and 12 cents a share in impairment charges related to its Intermix business, which is under strategic review. Analysts polled by FactSet had expected 19 cents a share, on sales of $4.7 billion.
Same-store sales at its namesake stores fell -6%. amid COVID-mandated store closures and restrictions in Canada, China, Europe and Japan. But North America comparable sales were positive.
Banana Republic Global comparable sales plummeted -22%. Athleta stores had +26% rise in comparable sales, while Old Navy stores comparable sales increased +6%.
Digital sales increased +49%, representing 46% of net sales during the quarter.
For fiscal 2021, Gap is projecting earnings to be in the range of $1.20 to $1.35 per share. Analysts had been expecting earnings of $1.28 per share.
The company is expecting net sales to be up a mid- to high-teens percentage compared with 2020, assuming Covid-related effects continue in the first half of 2021, and the retailer returns to pre-pandemic level of sales in the second half of the year, the company said. Analysts predicted year-over-year revenue growth of 14.1%, according to Refinitiv poll.
GAP sees its Stochastic Oscillator climbs out of oversold territory
On December 24, 2024, the Stochastic Oscillator for GAP moved out of oversold territory and this could be a bullish sign for the stock. Traders may want to buy the stock or buy call options. Tickeron's A.I.dvisor looked at 65 instances where the indicator left the oversold zone. In of the 65 cases the stock moved higher in the following days. This puts the odds of a move higher at over .
Technical Analysis (Indicators)
Bullish Trend Analysis
GAP moved above its 50-day moving average on November 21, 2024 date and that indicates a change from a downward trend to an upward trend.
The 50-day moving average for GAP moved above the 200-day moving average on December 17, 2024. This could be a long-term bullish signal for the stock as the stock shifts to an upward trend.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where GAP advanced for three days, in of 287 cases, the price rose further within the following month. The odds of a continued upward trend are .
Bearish Trend Analysis
The 10-day RSI Indicator for GAP moved out of overbought territory on December 09, 2024. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 35 similar instances where the indicator moved out of overbought territory. In of the 35 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Momentum Indicator moved below the 0 level on December 16, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on GAP as a result. In of 80 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 GAP turned negative on December 12, 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 .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where GAP declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
GAP broke above its upper Bollinger Band on November 22, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
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 (3.964). P/E Ratio (20.336) is within average values for comparable stocks, (110.742). Projected Growth (PEG Ratio) (1.003) is also within normal values, averaging (1.444). Dividend Yield (0.022) settles around the average of (0.028) among similar stocks. P/S Ratio (0.688) is also within normal values, averaging (1.139).
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very 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 Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. GAP’s price grows at a higher rate over the last 12 months as compared to 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. GAP’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 74, placing this stock better than average.
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.
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General Information
an operator of stores that retail clothing, accessories and personal care products
Industry ApparelFootwearRetail