Upcoming AWS Coverage on Urban Outfitters Post-Earnings Results

LONDON, UK / ACCESSWIRE / November 29, 2016 / Active Wall St. announces its post-earnings coverage on The Gap, Inc. (NYSE: GPS). The company posted its third quarter fiscal 2016 earnings on November 17, 2016. The Apparel chain reported its seventh consecutive quarterly decline in sales as demand for its Gap and banana republic brands remained sluggish. The company also announced more store closures. Register with us now for your free membership at: http://www.activewallst.com/register/

One of Gap's competitors within the Apparel Stores space, Urban Outfitters, Inc. (NASDAQ: URBN), reported on November 22, 2016, record Q3 sales. AWS will be initiating a research report on Urban Outfitters in the coming days.

Today, AWS is promoting its earnings coverage on GPS; touching on URBN. Get our free coverage by signing up to:

http://www.activewallst.com/registration-3/?symbol=GPS

http://www.activewallst.com/registration-3/?symbol=URBN

Earnings Reviewed

For the three months ended on October 31st, 2016, GAAP reported net income of $204 million, or $0.51 per share, down from $248 million, or $0.61 per share, for the same period last year. The company's adjusted earnings were $0.60 per share, meeting analysts' expectations of $0.60 per share. For Q3 2016, Gap's net sales decreased 2% to $3.80 billion compared to $3.86 billion for Q3 2015, also meeting analysts' estimates.

Gap's Q3 2016 gross margin was up 200 basis points over Q3 2015, largely driven by Old Navy. Merchandise margins expanded 220 basis points and rent and occupancy deleveraged 20 basis points.

Gap's comparable sales (Comps) for Q3 2016 were down 3%, including an estimated negative impact from the Fishkill distribution center fire of approximately 2% versus a 2% decrease last year. For Gap Global, the company reported an 8% in comps, including an estimated negative impact from the Fishkill distribution center fire of approximately 4% versus negative 4% in Q3 2015. The company's Banana Republic Global segment reported an 8% drop in comps, including an estimated negative impact from the Fishkill distribution center fire of approximately 2% versus negative 12% in Q3 2015. Gap's Old Navy Global posted a 3% growth in comps, including an estimated negative impact from the Fishkill distribution center fire of approximately 1% versus growth of 4% in Q3 2015.

Balance Sheet

GAP ended Q3 2016 with $1.52 billion in cash and cash equivalents. Year-to-date free cash flow, defined as net cash provided by operating activities less purchases of property and equipment, was an inflow of $417 million. During the reported quarter, the company paid a dividend of $0.23 per share. In addition, on November 10, 2016, the company announced that its Board of Directors authorized Q4 2016 dividend of $0.23 per share. Gap's Fiscal year-to-date capital expenditures were $383 million. For FY16, the company continues to expect capital spending to be approximately $525 million. The company ended Q3 2016 with inventory down 4% on a y-o-y basis. Gap is projecting total inventory dollars at the end of Q4 2016 to be down low-single-digits on a y-o-y basis.

Real Estate

As on October 29th, 2016, Gap had 3,742 store locations in 50 countries, of which 3,281 were company-operated. During Q3 2016, the company opened 36 and closed 28 company-operated stores. Square footage was down 2% compared with last year. Gap now expects net closures of about 65 company-operated stores in FY16 and a 3% reduction of square footage as compared to last year, earlier the company forecasted the closure of 50 stores.

Earnings Outlook

For FY16, Gap expects its diluted earnings per share to be in the range of $1.41 to $1.50. The company reaffirmed its adjusted diluted earnings per share to be in the range of $1.87 to $1.92 for FY16, excluding the negative impact of restructuring costs, which is now expected to be approximately $0.42 to $0.46. Excluding restructuring costs, the company continues to expect its adjusted operating margin to be about 8.5% in FY16.

Stock Performance

Gap's stock was marginally down by 0.35%, closing Monday's session at $25.48 on volume of 8.76 million shares, which was higher than its 3 month average volume of 6.09 million shares. The company's shares gained 7.21% since the beginning of the year. Additionally, the stock has surged 44.68% in the last six months. The company's shares are trading at a PE ratio of 15.24 and have a dividend yield of 3.61%.

Active Wall Street:

Active Wall Street (AWS) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and micro-cap stocks. AWS has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.

AWS has not been compensated; directly or indirectly; for producing or publishing this document.

PRESS RELEASE PROCEDURES:

The non-sponsored content contained herein has been prepared by a writer (the "Author") and is fact checked and reviewed by a third party research service company (the "Reviewer") represented by a credentialed financial analyst, for further information on analyst credentials, please email info@activewallst.com. Rohit Tuli, a CFA® charterholder (the "Sponsor"), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable-effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by AWS. AWS is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.

NO WARRANTY

AWS, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. AWS, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, AWS, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.

NOT AN OFFERING

This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither AWS nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit http://www.activewallst.com/disclaimer/.

CONTACT

For any questions, inquiries, or comments reach out to us directly. If you're a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:

Email: info@activewallst.com

Phone number: 1-858-257-3144

Office Address: 3rd floor, 207 Regent Street, London, W1B 3HH, United Kingdom

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

SOURCE: Active Wall Street