Shares of Gap (NYSE:GPS) fell almost 7% in morning trading Thursday as the market braces for the impact from a second wave of COVID-19 cases.
The retailer has more than doubled in value since hitting a low point in March as the coronavirus outbreak was declared a pandemic, but Gap's stock has given back 26% since hitting a recent high of $13.75 per share.
Gap still has significant problems as stores reopen. Its Banana Republic, Gap, and Old Navy brands have suffered from declining sales for a year or more, even as it updated investors on its progress and noted its stores had recovered 70% of their pre-pandemic sales levels.
Getting its stores open and running again is key to Gap and other retailers returning to a sense of normalcy. But the company also needs to prove its business will not just tread water but be able to ride a wave of sales higher.
For the moment it needs to contend with the pandemic, a possible second wave of new cases, and side issues such as mall operator Simon Property Group suing it for failing to pay rent.
Investors taking profits after the big run-up in Gap's stock, especially at a time of renewed uncertainty, is not a surprise at this point.