Fall In Sales To Weigh On Gap In The Second Quarter
Gap Inc (NYSE:GPS) is scheduled to report its Q1 fiscal 2016 earnings on August 18th, though it has already reported its sales figures for both the quarter and the final month in a recent press release. The company announced a slip in the revenue and same-stores sales for the month of July, as well as for the second quarter. This coming on the back of promising results in June, when the company posted 2% comparable sales growth, is definitely disappointing.
See our complete analysis for Gap Inc.
Given the general weakness in the retail industry, and increasing competition from fast-fashion and internet retailers, we expect the company’s Old Navy brand to be the standout performer, with falling revenue per square foot in its namesake Gap brand, and its higher-priced Banana Republic brand.
While the second quarter comparable sales improved on a sequential basis, they remained in negative territory, and worsened in comparison to June results. This implies that a turnaround isn’t in the cards, as of now. For the quarter, the comps declined 2%, on a 3% decline at Gap, a 9% fall at Banana Republic, and flat performance at Old Navy. This performance was better than that for the first quarter, when the company reported a 5% comparable sales decline. After the positive performance in June, up 2%, driven by 5% growth at Old Navy, July sales plunged 4%, with a 4% fall at Gap, a 14% decline at Banana Republic, and a flat performance at Old Navy. The July results were much worse that what was expected by analysts polled by Thomson Reuters, who had expected Gap’s overall comps to decrease by 0.3% last month, including a fall of 3.9% at Banana Republic, a drop of 1.4% at its namesake brand, and an increase of 1.6% at Old Navy. While June benefited from the Memorial Day holiday, back to school sales were expected to help in July.
The company has been struggling with falling sales as of late, and the stock has declined considerably in the face of a gloomy outlook. While the stock has declined substantially in the past five months, it is trading at a positive from its opening on January 4th.
Have more questions about Gap Inc? See the links below:
- After Positive Results In June, Gap Returns To A Sales Decline
- Are There Signs Of A Turnaround At Gap, Or Is It Just A Blip On The Radar?
- Are Gap Inc’s Earnings Volatile?
- What’s Gap Inc’s Revenue & Net Income Breakdown In Terms Of Different Brands?
- By How Much Did Gap Inc’s Revenue & EBITDA Grow In The Last Five Years?
- What Is Gap Inc’s Fundamental Value Based On Expected 2016 Results?
- By What Percentage Can Gap Inc’s Revenues Grow Over The Next Three Years?
- How Are Gap Inc’s Old Navy Revenues & Earnings Expected To Grow Over The Next Five Years?
- How Are Gap Inc’s Banana Republic Revenues & Earnings Expected To Grow Over The Next Five Years?
- How Much Revenues Can Gap Inc’s Athleta Brand Add By 2020?
- What’s Next For Gap’s Stock?
- Mind The Gap: Underwhelming Q2 Earnings Likely For The Apparel Retailer
- With The Stock Almost Flat This Year, Will Q1 Results Drive Gap’s Stock Higher?
- Gap Stock Almost Flat This Year, What’s Next?
- Does Gap Stock Have More Room To Run After Rising 67% This Year?
- Gap Q2 Earnings: What Are We Watching?
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