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Gap's (GPS) Althleta Brand Expands in Canada With Five Stores

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Gap Inc.’s (GPS - Free Report) Althleta brand announced the opening of five stores in Canada, with the first one launched in the Mapleview Centre in Burlington, Ontario. The move comes after the company entered the Canada market last year, driven by positive customer response. Also, it launched its e-commerce business in Canada last August.

The new performance-lifestyle store marks Athleta’s third store in Canada, with the other two located at the Park Royal Shopping Centre in West Vancouver and the Yorkdale Shopping Centre in Toronto. The remaining four stores are likely to be opened at Chinook Centre, Calgary; Sherway Gardens, Etobicoke; West Edmonton Mall, Edmonton; and 1035 Robson Street, Vancouver.

The new stores will offer trending performance lifestyle products for women and girls in more than 200 styles, with sizes ranging from XXS-2X. Also, customers can avail in-store styling appointments, free alterations and wellness-focused community events.

With people in Canada returning to stores, Athleta is looking forward to leveraging its brand strength via its store fleet growth strategy. That said, management foresees Canada as a key growth driver in the long term.

Driven by new product offerings, localized marketing and increased brand awareness, Athleta witnessed better-than-expected customer acquisition of more than 40% in the first quarter of fiscal 2022. Also, events related to the launch of Alicia Keys and Simone Biles collections, as well as a partnership with the Toronto Six Women's professional hockey team, bode well.

Per MarketWatch, Gap’s other powerhouse brand Old Navy is entering the metaverse with its mascot, Magic the Dog, and its annual Flag Tee collection. The brand will offer 1,993 common NFTs, featuring Magic wearing a Flag Tee from Jun 29. There will also be a special auction of a Magic the Dog NFT, the proceeds of which will go to the Boys & Girls Clubs of America.

Gap has been long gaining from continued momentum across its Athleta and Old Navy brands. Old Navy remains focused on creating affordable, high-quality fashion for the whole family, which remains a significant long-term growth opportunity for the company.

Meanwhile, the Athleta brand’s value-driven active and lifestyle categories, increased digital marketing investments, and focus on product strategy have been aiding sales. Increased focus on performance active, as well as active lifestyle products to capitalize on the evolving shopping trends, bodes well. Driven by these factors, Athleta remains on track to reach $2 billion in net sales by fiscal 2023.


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All said, we hope that Gap will tide through the current macro consumer environment and get back on track, driven by strength in Athleta and Old Navy brands. We note that this Zacks Rank #5 (Strong Sell) company has plunged 49.2% year to date, underperforming the industry’s decline of 41.9%.

Stocks to Consider

Here are three better-ranked stocks to consider — Dillard’s (DDS - Free Report) , Boot Barn Holdings (BOOT - Free Report) and Canada Goose (GOOS - Free Report) .

Dillard’s operates as a departmental store chain, featuring fashion apparel and home furnishings. It presently sports a Zacks Rank #1 (Strong Buy). DDS has a trailing four-quarter earnings surprise of 224.1%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Dillard’s current financial-year sales suggests growth of 6.1%, while the same for EPS indicates a decline of 33.9% from the year-ago period’s reported numbers. DDS has an expected EPS growth rate of 12.6% for three-five years.

Boot Barn, which provides western and work-related footwear, apparel and accessories, currently has a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 25.2%, on average.

The Zacks Consensus Estimate for Boot Barn’s current financial-year sales and EPS suggests growth of 17% and 4.4%, respectively, from the year-ago period’s reported figures. BOOT has an expected EPS growth rate of 20% for three-five years.

Canada Goose is the designer, manufacturer, distributor and retailer of premium outerwear for men, women and children. It currently carries a Zacks Rank #2. GOOS has a trailing four-quarter earnings surprise of 65.9%, on average.

The Zacks Consensus Estimate for Canada Goose’s current financial year’s EPS suggests growth of 64.4% from the year-ago period’s reported figures. GOOS has an expected EPS growth rate of 27.4% for three-five years.