Gap Inc. (NYSE:GPS) reports earnings after today’s close, and First Call estimates are $0.19 EPS on $3.7 Billion in revenues. The coming quarter is expected to post $0.21 EPS on revenues of $3.88 Billion. The only thing that matters today is the EPS number and guidance, because the quarter revenues are already a known item.
How many quarters of ‘less bad’ can there be? It disclosed -7% same store sales for July, although its total sales were up 1% on stronger international sales of +11% total and +3% on a comparable store basis. We already have seen the preliminary retail sales numbers with total company sales being $3.69 Billion.
Analysts still seem mixed to positive on the company, although it looks like average price target is still north of $21.00. Options traders appear to be braced for a move of up to 4% in either direction.
Gap’s chart is only so-so after it put in a new year low earlier this month during the market malaise. Shares are actually up almost 15% since then. It seems that in a tighter credit environment that there are stillmany large pending deals that are not yet considered done and completed, so the hopes for buying an ailing retailer with a $14 Billion market cap are less than they were earlier this year. We’ll have to see if Glenn Murphy, its new CEO, is going to be able to make a difference to what has turned into a perpetually ailed stock that has defined the term ‘dead money’ for about 4 years.
Jon C. Ogg
August 23, 2007
Jon Ogg can be reached at email@example.com; he does not own securities in the companies he covers.