Gap Inc (GPS) Defies Retail Landscape With Q1 Comp and Earnings Growth

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Gap Inc (NYSE:GPS) beat Q1 expectations, delivering EPS that were 7 cents above analyst forecasts and sales that were $5o million more. GPS stock is up more than 4% in pre-market trading this morning.

Gap Inc GPS

The apparel retailers reported EPS of 36 cents compared to 32 cents last year, with earnings of $143 million versus $127 million in Q1 2016. While beating analysts forecasts, sales were flat at $3.44 billion. Same-store sales rose 2% with an 8% jump in comp sales at Old Navy.

“We are pleased with our positive comp and earnings growth this quarter,” said Art Peck, president and CEO, in the company’s earnings announcement. “We’ve made substantial improvements in product quality and fit, and our increasing responsive capabilities are enabling us to better react to trends and demand.”

Later, in GPS’ management’s conference call with analysts, Peck offered some insight into Gap’s view of the current retail landscape’s downsizing, bankruptcies, soft store traffic and consumer spending lagging overall sentiment. “We of course are not immune to any of these challenges that are facing the industry as a sector, but we also believe quite strongly and we feel that the results of Q1 are continuing to validate that belief that we are uniquely positioned to turn these challenges into opportunities.”

InvestorPlace market strategist Anthony Mirhaydari noted last week that GPS stock was then “dropping out of a two-month consolidation range near $26, setting up a test of the 50- and 200-day moving averages ahead of a likely drop to eight-month lows near $21 — which would be worth a near 20% decline from here.” Gap shares closed yesterday at $23.19.

Gap also reaffirmed its 2017 EPS outlook of $1.95 to $2.05. Wall Street is projecting full year EPS of $1.99.


Article printed from InvestorPlace Media, https://investorplace.com/2017/05/gap-inc-gps-defies-retail-landscape-with-q1-comp-and-earnings-growth/.

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