A Glimpse of Gap's Earnings Potential

Gap GAP is preparing to release its quarterly earnings on Thursday, 2025-05-29. Here's a brief overview of what investors should keep in mind before the announcement.

Analysts expect Gap to report an earnings per share (EPS) of $0.43.

Gap bulls will hope to hear the company announce they've not only beaten that estimate, but also to provide positive guidance, or forecasted growth, for the next quarter.

New investors should note that it is sometimes not an earnings beat or miss that most affects the price of a stock, but the guidance (or forecast).

Earnings Track Record

Last quarter the company beat EPS by $0.16, which was followed by a 18.84% increase in the share price the next day.

Here's a look at Gap's past performance and the resulting price change:

Stock Performance

Shares of Gap were trading at $28.44 as of May 27. Over the last 52-week period, shares are up 25.27%. Given that these returns are generally positive, long-term shareholders are likely bullish going into this earnings release.

Analysts' Take on Gap

Understanding market sentiments and expectations within the industry is crucial for investors. This analysis delves into the latest insights on Gap.

With 18 analyst ratings, Gap has a consensus rating of Neutral. The average one-year price target is $27.61, indicating a potential 2.92% downside.

Comparing Ratings with Competitors

In this comparison, we explore the analyst ratings and average 1-year price targets of Urban Outfitters, Burlington Stores and Boot Barn Holdings, three prominent industry players, offering insights into their relative performance expectations and market positioning.

• Analysts currently favor an Neutral trajectory for Urban Outfitters, with an average 1-year price target of $65.32, suggesting a potential 129.68% upside.
• Analysts currently favor an Outperform trajectory for Burlington Stores, with an average 1-year price target of $321.64, suggesting a potential 1030.94% upside.
• Analysts currently favor an Outperform trajectory for Boot Barn Holdings, with an average 1-year price target of $170.0, suggesting a potential 497.75% upside.

Comprehensive Peer Analysis Summary

The peer analysis summary outlines pivotal metrics for Urban Outfitters, Burlington Stores and Boot Barn Holdings, demonstrating their respective standings within the industry and offering valuable insights into their market positions and comparative performance.

Key Takeaway:

Gap is positioned in the middle among its peers for consensus rating. It ranks at the bottom for revenue growth. In terms of gross profit, Gap is at the top among its peers. However, for return on equity, Gap is positioned in the middle compared to its peers.

Discovering Gap: A Closer Look

Gap retails apparel, accessories, and personal-care products under the Gap, Old Navy, Banana Republic, and Athleta brands. Old Navy generates more than half of Gap's sales. The firm also operates e-commerce sites, outlet stores, and specialty stores under various Gap names. Gap operates approximately 2,500 stores in North America, Europe, and Asia and franchises about 1,000 more in Asia, Europe, Latin America, and other regions. Gap was founded in 1969 and is based in San Francisco.

Breaking Down Gap's Financial Performance

Market Capitalization Analysis: Positioned below industry benchmarks, the company's market capitalization faces constraints in size. This could be influenced by factors such as growth expectations or operational capacity.

Decline in Revenue: Over the 3 months period, Gap faced challenges, resulting in a decline of approximately -3.47% in revenue growth as of 31 January, 2025. This signifies a reduction in the company's top-line earnings. In comparison to its industry peers, the company stands out with a growth rate higher than the average among peers in the Consumer Discretionary sector.

Net Margin: The company's net margin is a standout performer, exceeding industry averages. With an impressive net margin of 4.97%, the company showcases strong profitability and effective cost control.

Return on Equity (ROE): Gap's ROE excels beyond industry benchmarks, reaching 6.44%. This signifies robust financial management and efficient use of shareholder equity capital.

Return on Assets (ROA): Gap's ROA stands out, surpassing industry averages. With an impressive ROA of 1.74%, the company demonstrates effective utilization of assets and strong financial performance.

Debt Management: Gap's debt-to-equity ratio stands notably higher than the industry average, reaching 1.68. This indicates a heavier reliance on borrowed funds, raising concerns about financial leverage.

To track all earnings releases for Gap visit their earnings calendar on our site.

This article was generated by Benzinga's automated content engine and reviewed by an editor.