The 10-second takeaway
For the quarter ended Jan. 28 (Q4), Gap met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue shrank slightly and GAAP earnings per share contracted significantly.
Margins dropped across the board.
Gap booked revenue of $4.28 billion. The 28 analysts polled by S&P Capital IQ predicted a top line of $4.28 billion on the same basis. GAAP reported sales were 1.9% lower than the prior-year quarter's $4.36 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.44. The 31 earnings estimates compiled by S&P Capital IQ forecast $0.42 per share. GAAP EPS of $0.44 for Q4 were 27% lower than the prior-year quarter's $0.60 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 32.8%, 540 basis points worse than the prior-year quarter. Operating margin was 8.7%, 500 basis points worse than the prior-year quarter. Net margin was 5.1%, 330 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $3.30 billion. On the bottom line, the average EPS estimate is $0.34.
Next year's average estimate for revenue is $14.83 billion. The average EPS estimate is $1.79.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 529 members rating the stock outperform and 312 members rating it underperform. Among 271 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 174 give Gap a green thumbs-up, and 97 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Gap is hold, with an average price target of $19.43.
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