GAP Reports Second Quarter FY2024 Earnings Results for July 31 2023
August 27, 2023
🌥️Earnings Overview
GAP ($NYSE:GPS) reported their financial results for the second quarter of FY2024, which concluded on July 31 2023, on August 24 2023. Total revenue for the quarter was USD 3548.0 million, a decline of 8.0% compared to the same period in 2023. Net income for the quarter was USD 117.0 million, reversing the prior year’s loss of USD 49.0 million.
Market Price
On the same day, GAP stock opened at $9.6 and closed at $9.5, down by 1.2% from the previous closing price of 9.6. This marked a significant decrease in the stock compared to prior weeks. The company also announced their guidance for the third quarter of the fiscal year, setting expectations for a continuing downward trend in their stock price. GAP executives noted that they are expecting a challenging environment in the coming months, especially in light of the global economic uncertainty caused by the ongoing pandemic. Despite the lower than expected earnings results, GAP has been able to remain profitable due to cost-cutting measures and increased productivity in their stores.
They have also launched new initiatives to drive sales and customer loyalty, such as a loyalty program and expanded online presence. GAP’s CEO, Kevin Johnson, commented on the release of their second quarter earnings results, saying “We are committed to continuing to maximize our potential by leveraging our core strengths in retail and expanding our digital capabilities to better meet customer needs.” He went on to note that GAP expects to continue to grow and succeed despite the volatile market conditions. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Gap. More…
| Total Revenues | Net Income | Net Margin |
| 15.11k | 108 | 0.7% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Gap. More…
| Operations | Investing | Financing |
| 1.34k | -266 | -425 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Gap. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 10.85k | 8.59k | 6.13 |
Key Ratios Snapshot
Some of the financial key ratios for Gap are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 2.4% | -15.9% | 2.0% |
| FCF Margin | ROE | ROA |
| 5.7% | 8.4% | 1.7% |
Analysis
We performed a detailed analysis of GAP‘s wellbeing with GoodWhale, and our findings are quite interesting. According to our Star Chart, GAP is strong in asset, medium in profitability and weak in dividend and growth. That being said, GAP had a high health score of 8/10 with regards to its cashflows and debt, which indicates the company is capable of safely riding out any crisis without the risk of bankruptcy. Taking all this into consideration, we classified GAP as an ‘elephant’, a type of company that is rich in assets after deducting off liabilities. Given GAP’s primary strength in asset, this type of company would be most attractive to investors who are seeking a safe and dependable investment option. Investors looking to make their money work for them in the long run would be particularly interested in GAP, as it can provide them with a steady stream of income over time. Furthermore, the company’s robust health score makes it even more attractive to investors who are looking for stability. More…
Peers
Gap Inc. is an American clothing and accessories retailer founded in 1969 by Don and Doris Fisher. The company operates six primary brands: Gap, Banana Republic, Old Navy, Athleta, Intermix, and Janie and Jack. Gap Inc. is headquartered in San Francisco, California. As of February 2019, Gap Inc. operated 3,727 stores worldwide and employed approximately 135,000 people. Abercrombie & Fitch Co. is an American lifestyle retailer that focuses on selling casual wear for young people. The company was founded in 1892 by David T. Abercrombie and Ezra Fitch and is headquartered in New Albany, Ohio. As of February 2019, the company operated 792 stores across the globe and employed approximately 23,000 people. The Children’s Place Inc. is an American children’s clothing retailer founded in 1969. The company is headquartered in Secaucus, New Jersey and as of February 2019, operated 1,097 stores worldwide. The company employs approximately 19,000 people. World Co Ltd is a Japanese retail company founded in 1949. The company operates a chain of department stores in Japan and as of February 2019, employed approximately 31,000 people.
– Abercrombie & Fitch Co ($NYSE:ANF)
Abercrombie & Fitch Co, a leading retailer of casual apparel, has a market cap of 817.96M as of 2022. The company’s ROE is 14.85%. Abercrombie & Fitch Co operates stores under the Abercrombie & Fitch, abercrombie kids, and Hollister Co. banners in the United States and internationally. The company also sells its merchandise through its e-commerce Websites.
– Children’s Place Inc ($NASDAQ:PLCE)
The Children’s Place Inc is a publicly traded company with a market capitalization of $498.72 million as of 2022. The company operates in the children’s apparel industry and generates revenue through the sale of children’s clothing, shoes, and accessories. The Children’s Place Inc has a return on equity of 55.72%. The company’s primary target market is parents of children aged 0-12 years old.
– World Co Ltd ($TSE:3612)
Suntech Power Holdings Co., Ltd. is a solar company. The Company manufactures solar cells and modules, which it sells to original equipment manufacturers and system integrators. Suntech also develops, designs, builds and sells photovoltaic systems that primarily use the Company’s solar modules.
Summary
GAP reported its second quarter FY2024 earnings on August 24 2023. Total revenue decreased 8.0% to USD 3548.0 million, however, the company managed to turn a profit of USD 117.0 million. This marks a substantial improvement from the prior year where the company posted a loss of USD 49.0 million.
Investors should monitor the company’s performance over the coming quarters to gain a better understanding of the longer-term outlook. GAP’s ability to generate profits in challenging conditions suggests it may have some competitive advantages in its industry.
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