Gap: Nice Buying Opportunity
Gap ( GPS ) shares closed at $17.66 on June 24. Since May 19, shares are down more than 23%. At these current prices, Gap deserves a closer examination to see if a nice buying opportunity has emerged.
First some basics. Founded in 1969, Gap is a clothing retailer headquartered in San Francisco with a market cap of $9.72 billion. Gap shares have a 52-week high of $23.73 and a 52-week low of $16.62. The company operates 3,248 corporate and franchise stores worldwide in five business segments: Gap stores, Banana Republic stores, Old Navy stores, Athleta stores and the Piperlime online boutique.
The company expects to open 200 stores and close 125 stores in 2011. As of 2011, Gap and Old Navy stores each made up approximately 40% of sales and Banana Republic stores contributed 17. We can break the stores down further below:
Valuation
Gap currently is trading with a P/E of 9.3. That looks fairly cheap compared to competitors like Urban Outfitters ( URBN ) with a P/E of 19 and American Eagle Outfitters ( AEO ) with a P/E of 15.7. If we extend Gap's P/E back five years, it averages out to approximately 15. Additionally, in February of 2011 the company reported that the board of directors authorized an additional $2 billion for share repurchases; over the past two years, the company has repurchased approximately 28 million shares.
The company has a dividend yield of 2.5%, which may not seem like a whole lot, but compared to other retailers offering no dividends, Gap's dividend looks quite promising. EBITDA is currently $2.44 billion, up every fiscal year since 2007, and the company has $2.42 billion in cash on its balance sheet. However, GPS does have a debt-to-equity ratio of 1.13. Additionally, operating margins for Gap are currently 13% and net margins are 7%.
Going Forward
The company appears to be at a crossroads. The first quarter of 2011 was tough for the company and shareholders. Gross profit fell 6.9%, same-store sales fell 3% and net sales slid 1% yoy. The sluggish quarter was attributed to rising commodity prices, setbacks in Japan and poor consumer traffic in the stores .
CEO Glenn Murphy recently announced plans to increase operating margins and restructure the company due to changing economic conditions. Gap plans to close 200 Gap brand stores and increase the number of outlet stores, of which 40 will be Banana Republic outlet stores. Banana Republic outlet stores return margins of nearly 17%, compared to an average margin of 13% for all Gap segments.
The Gap Clothing - News
Gap Adventures has been forced to change its name in the US after losing a case against clothing retailer, The Gap on 24 June this year. After more than twenty years of operating under the Gap Adventure brand, the United States District Court ruled
Gap (GPS) shares closed at $17.66 on June 24. Since May 19, shares are down more than 23%. At these current prices, Gap deserves a closer examination to see if a nice buying opportunity has emerged. First some basics. Founded in 1969, Gap is a clothing
The San Francisco-based chain will reduce its US store count to 700 by 2013, said Glenn Murphy, Gap chairman and CEO, during an investor conference this week. The company did not release specific stores it will close. The Houston area has 22 Gap stores
[WWD] • Annabelle Dexter-Jones, Charlotte Ronson's half sister and muse, is planning to launch her own clothing line next February. [WWD] • Here's a new overshare-y post on xoJane.com about compulsive shopping. [xoJane.com] • Rad Hourani has produced a
--Fall into the Gap if you can find one. Gap Inc. plans to close 200 stores within two years. The San Francisco-based clothing chain will reduce its US store count to 700 by 2013, says Glenn Murphy, the company's CEO. The company did not release a
Gap Clothing | Vintage Skirt
When it comes to fashion a lot of brand names and power fashion house casts are doing their best to be on the lead spot. Others are focusing on girl’s fashion,while other into a men apparels and some are in kids fashion instead, just to be on top. However, the quality and the prices of those clothes are the most people looking forward to have with to of course. Because nowadays, people are too often practical to have these cheap of pieces to them on . And the good things was, the Gap brand has this Gap coupons that we can may use to actually. To lessen the clothes prices that we wanted to buy, on the Gap Store.
Actually I am Gap baby. Yeah! since when I was I child then , My mum used to buy me some Gap clothes for me to wear. Because of the smooth cotton that the brand uses on their tees and jeans. I think the legacy of the brand for us youth is to wear these clothes that we’ve been comfortably to wear of with, that the Gap brand are most concerned about. In additional, the brand name had proven their collection already when it comes to their jeans,shoes,shirt,tees,jackets and even on undies. I think the advantage of the brand was this best approached to people to give such discounted items to their store that we can avail through the coupon codes that we can actually find anywhere,especially online. This was the good deal that the Gap brand has most of the time. That most other brands haven’t.
Woah, Gap Adventures has to change its name after 20 years because NOW the clothing store feels threatened? , your reply?
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RT : I wish we could go back to the days when people weren't ashamed of wearing articles of clothing with large GAP logos. 
I wish we could go back to the days when people weren't ashamed of wearing articles of clothing with large GAP logos. 
RT : In my local shopping centre they have created a walkway between the clothing store for adults and kids to bridge the generation gap.The Gap Clothing - Bookshelf
New York Magazine
So the concept was - modified, and the Gap became a back-to- basics shop with a broad selection of low- priced Levi Strauss clothing and an inventory of ...Brand royalty, how the world's top 100 brands thrive and survive
Also, all Gap clothing is private-label merchandise made specifically for the company. There is complete control over the 'Gap look' from the design board ...Plunkett's Retail Industry Almanac 2008
All Gap clothing is purchased from vendors in approximately 50 countries and is private-label, designed by and made specifically for the firm. ...Fundamentals of Marketing
Expansion into children's clothing followed the success of Gap stores in ... In that year, over 90 percent of teens surveyed labelled Gap clothes as "cool. ...Plunkett's retail industry almanac
All Gap clothing is purchased from vendors in approximately 50 countries and is private-label, designed by and made specifically for the firm. ...Daily News Directory
Shop clothes for women, men, maternity, baby, and kids | Gap
Official site for the retailer Gap, offering online shopping for men, women, children, and babies.
Womens Clothes: jeans, tops, skirts, dresses, pants | Gap
Visit the other Gap Inc. Brands: Sign In Navigation: Shopping Bag: ... Girls School Uniforms | New Boys Clothing | Plus Size Capris | Women's Shoes ...
Gap (clothing retailer) - Wikipedia, the free encyclopedia
The Gap, Inc.[2] (NYSE: GPS) is an American clothing and accessories retailer based in ... The original trademark for The Gap was as a service mark for retail ...
Amazon.com: The Gap - Clothing & Accessories
Amazon.com: The Gap - Clothing & Accessories ... B004HWH7SA on. MIND THE GAP warning yellow-on-black T Countries / regions / cities Dark T-Shirt by CafePress ...
The GAP Clothing Mall
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