Gap Inc. (GPS) – Driving success with leaner inventories

Gap Inc. (GPS) Equity Report (Q2FY24)

Stock performance: Gap Inc.’s stock gave returns of 22.4% and 15.9% in the period of three months and one year. The stock has a 52-week high of $15.49 and a 52-week low of $7.22. The stock gave returns of -37.9% and CAGR of -14.7% over a period of three years. The stock had a 200-Day Moving Average of $10.49 and a 50-Day Moving Average of $11.08.

Quarter Performance: In Q2FY24, net sales decreased by 8% to $3.55bn, compared to $3.86b, inclusive of an estimated 1-point foreign exchange headwind and 2 percentage points of negative impact from the sale of Gap China.

Guidance: For Q3FY24, GPS is estimating net sales could decrease in the low double-digit range compared to last year’s net sales of $4.04bn. The company anticipates that net sales could decrease in the mid-single digit range compared to last year’s net sales of $15.6bn in FY24. The company expects capital expenditures in the range of $500mn to $525mn in FY24.

Highlights

In Q2FY24, revenue from Old Navy Global decreased by 6.2% to $1.96bn from $2.09bn in Q2FY23. This decrease happened because even though it saw strong sales in women’s tops and woven bottoms and better sales in men’s and kids’ clothing, it was offset by weaker demand for activewear and continued slow demand from customers with lower incomes.

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Highlights

Valuation

– Enterprise Value
– CrispIdea Forecast
– CrispIdea Segment Forecast
– Economic Value Added Analysis
– P/E Analysis
– Peer Valuation
– CrispIdea Forecast Relative to Consensus
– Consensus History and Surprise
– Consensus Momentum

Actual & Historical Performance

– Income Statement
– Balance Sheet
– Cash Flow
– 10 Year Historical Performance
– Ratio Analysis
– Du Pont Analysis
– ROIC & ROCE Analysis
– Segment Performance
– Key Metrics
– M&A Deals

Peer Performance

– Summary
– Profitability
– Growth
– Price Performance

Ownership

Stock Price Performance

Crispidea Coverage

No of Pages: 41

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