Gap Shares Popped: What You Need to Know (GPS)

Gap Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of apparel retailer Gap (NYSE: GPS ) climbed 10% on Thursday after its monthly sales and fourth-quarter guidance topped Wall Street expectations.

So what: Gap's January same-store sales declined 3% on heavy clearances, but it was better than the 4.9% drop that analysts had estimated, suggesting that it is finally building some momentum. It's no secret that Gap has struggled in recent years, but a shakeup in management and the institution of a "Global Creative Center" to improve the design process seems to be taking hold.

Now what: Looking forward, management sees fourth-quarter EPS of $0.41-$0.42, which is well above the consensus of $0.35. "January was largely clearance-based, and we're pleased we successfully cleared holiday inventory," said CEO Glenn Murphy. "As we transition to a new year, our teams are focused on making the necessary steps to improve our business performance in 2012." Jumping on a rally isn't exactly ideal, but with the stock still trading at a clear P/E discount to the industry, Gap might have some decent room to run.

Interested in more info on Gap? Add it to your watchlist.

The Steve Jobs Betrayal
You may already know that in the final year of his life, Jobs revealed a stunning betrayal — and told his biographer, "I will spend my last dying breath... and every penny of Apple's $40 billion in the bank to right this wrong." What was it that made Jobs so irate — and why could it make a few in-the-know investors some major profits over the coming months and years?

Enter your email address below to find out what made Jobs so enraged!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool owns shares of Gap. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment icon found on every comment.