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Gap (GPS) to Report Q3 Earnings: Here's How It is Poised
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The Gap, Inc. (GPS - Free Report) is scheduled to report third-quarter fiscal 2022 numbers on Nov 17. The company is likely to register declines in the top and bottom lines when it reports third-quarter fiscal 2022 results.
The Zacks Consensus Estimate for the fiscal third-quarter bottom line is pegged at 1 cent per share, suggesting a sharp decline of 96.3% from 27 cents reported in the prior-year quarter. The consensus estimate for the fiscal third quarter has been unchanged in the past 30 days. For revenues, the consensus mark is pegged at $3.8 billion, indicating a 3.6% decline from that reported in the year-ago quarter.
In the last reported quarter, Gap’s earnings surpassed the Zacks Consensus Estimate by 300%. The company has reported an earnings surprise of 10.2%, on average, in the trailing four quarters.
Gap’s fiscal third-quarter results are expected to reflect the impacts of the changing consumer preference from casual wear to dressier clothes, as well as higher inventory, a tough macroeconomic environment and elevated costs. The company has been witnessing industry-wide challenges and headwinds in its Old Navy brand, including issues related to the launch of BODEQUALITY. Also, lower-than-anticipated demand in key categories like active, fleece, and kids and baby are likely to have dented the fiscal third-quarter performance.
The company has been witnessing higher air freight costs. Huge discounts at Old Navy and rising commodity price increases are expected to have acted as other deterrents. Also, high inventory levels due to longer transit times, more delays, pack-and-hold strategies, and elevated AUC and input costs have been headwinds.
On its last reported quarter’s earnings call, management noted that the company entered the fiscal third quarter with higher inventory. This is likely to have weighed on the fiscal third-quarter performance.
However, management remained optimistic about sales in the second half of fiscal 2022. It anticipated air freight costs to decline in the second half of fiscal 2022, suggesting improved costs for the fiscal third quarter. The bottom line in the fiscal third quarter is expected to have gained from the sale of its UK distribution center.
Gap has long been gaining from the continued momentum across its Athleta brand. Strength in women’s active and wellness category, along with an increased focus on performance active as well as active lifestyle products to capitalize on the evolving shopping trends, bodes well.
Strength in Banana Republic has also been a key driver in recent quarters. The company’s fiscal third-quarter performance is expected to have benefited from the easing of fuel prices, which is likely to have led to higher discretionary spending.
Gap has been on track with the execution of its Power Plan 2023, focusing on store fleet optimization. The company’s efforts to leverage its powerful platform to deliver competitive omni capabilities to meet customers’ needs, all fueled by its scaled operations, are likely to have aided sales in the fiscal third quarter.
Zacks Model
Our proven model does not conclusively predict an earnings beat for Gap this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Gap has a Zacks Rank #2 and an Earnings ESP of 0.00%.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
Burlington Stores (BURL - Free Report) currently has an Earnings ESP of +8.48% and a Zacks Rank of 2. The company is likely to register declines in the top and bottom lines when it reports third-quarter fiscal 2022 numbers. The consensus mark for BURL’s quarterly earnings has moved up by a penny in the past seven days to 52 cents per share. The consensus estimate suggests a 61.8% decline from the year-ago quarter’s reported number.
The Zacks Consensus Estimate for Burlington Stores’ quarterly revenues is pegged at $2.1 billion, which suggests a decline of 10.9% from the figure reported in the prior-year quarter.
Macy's (M - Free Report) currently has an Earnings ESP of +18.92% and a Zacks Rank of 3. The company is likely to register decreases in the top and bottom lines when it reports third-quarter fiscal 2022 numbers. The consensus mark for M’s quarterly earnings has moved up by a penny in the past 30 days to 19 cents per share. However, the consensus estimate suggests an 84.6% decline from the year-ago quarter’s reported number.
Macy’s top line is expected to decline year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $5.17 billion, which suggests a rise of 4.9% from the figure reported in the prior-year quarter.
Dollar Tree (DLTR - Free Report) currently has an Earnings ESP of +6.57% and a Zacks Rank of 3. The company is likely to register top and bottom-line growth when it reports third-quarter fiscal 2022 results. The consensus mark for DLTR’s quarterly revenues is pegged at $6.8 billion, which suggests 6.5% growth from the figure reported in the prior-year quarter.
The consensus mark for DLTR’s quarterly earnings has been unchanged in the past 30 days at $1.16 per share. The consensus estimate suggests growth of 20.8% from the year-ago quarter.
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Gap (GPS) to Report Q3 Earnings: Here's How It is Poised
The Gap, Inc. (GPS - Free Report) is scheduled to report third-quarter fiscal 2022 numbers on Nov 17. The company is likely to register declines in the top and bottom lines when it reports third-quarter fiscal 2022 results.
The Zacks Consensus Estimate for the fiscal third-quarter bottom line is pegged at 1 cent per share, suggesting a sharp decline of 96.3% from 27 cents reported in the prior-year quarter. The consensus estimate for the fiscal third quarter has been unchanged in the past 30 days. For revenues, the consensus mark is pegged at $3.8 billion, indicating a 3.6% decline from that reported in the year-ago quarter.
In the last reported quarter, Gap’s earnings surpassed the Zacks Consensus Estimate by 300%. The company has reported an earnings surprise of 10.2%, on average, in the trailing four quarters.
The Gap, Inc. Price and EPS Surprise
The Gap, Inc. price-eps-surprise | The Gap, Inc. Quote
Key Factors to Note
Gap’s fiscal third-quarter results are expected to reflect the impacts of the changing consumer preference from casual wear to dressier clothes, as well as higher inventory, a tough macroeconomic environment and elevated costs. The company has been witnessing industry-wide challenges and headwinds in its Old Navy brand, including issues related to the launch of BODEQUALITY. Also, lower-than-anticipated demand in key categories like active, fleece, and kids and baby are likely to have dented the fiscal third-quarter performance.
The company has been witnessing higher air freight costs. Huge discounts at Old Navy and rising commodity price increases are expected to have acted as other deterrents. Also, high inventory levels due to longer transit times, more delays, pack-and-hold strategies, and elevated AUC and input costs have been headwinds.
On its last reported quarter’s earnings call, management noted that the company entered the fiscal third quarter with higher inventory. This is likely to have weighed on the fiscal third-quarter performance.
However, management remained optimistic about sales in the second half of fiscal 2022. It anticipated air freight costs to decline in the second half of fiscal 2022, suggesting improved costs for the fiscal third quarter. The bottom line in the fiscal third quarter is expected to have gained from the sale of its UK distribution center.
Gap has long been gaining from the continued momentum across its Athleta brand. Strength in women’s active and wellness category, along with an increased focus on performance active as well as active lifestyle products to capitalize on the evolving shopping trends, bodes well.
Strength in Banana Republic has also been a key driver in recent quarters. The company’s fiscal third-quarter performance is expected to have benefited from the easing of fuel prices, which is likely to have led to higher discretionary spending.
Gap has been on track with the execution of its Power Plan 2023, focusing on store fleet optimization. The company’s efforts to leverage its powerful platform to deliver competitive omni capabilities to meet customers’ needs, all fueled by its scaled operations, are likely to have aided sales in the fiscal third quarter.
Zacks Model
Our proven model does not conclusively predict an earnings beat for Gap this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Gap has a Zacks Rank #2 and an Earnings ESP of 0.00%.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
Burlington Stores (BURL - Free Report) currently has an Earnings ESP of +8.48% and a Zacks Rank of 2. The company is likely to register declines in the top and bottom lines when it reports third-quarter fiscal 2022 numbers. The consensus mark for BURL’s quarterly earnings has moved up by a penny in the past seven days to 52 cents per share. The consensus estimate suggests a 61.8% decline from the year-ago quarter’s reported number.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Burlington Stores’ quarterly revenues is pegged at $2.1 billion, which suggests a decline of 10.9% from the figure reported in the prior-year quarter.
Macy's (M - Free Report) currently has an Earnings ESP of +18.92% and a Zacks Rank of 3. The company is likely to register decreases in the top and bottom lines when it reports third-quarter fiscal 2022 numbers. The consensus mark for M’s quarterly earnings has moved up by a penny in the past 30 days to 19 cents per share. However, the consensus estimate suggests an 84.6% decline from the year-ago quarter’s reported number.
Macy’s top line is expected to decline year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $5.17 billion, which suggests a rise of 4.9% from the figure reported in the prior-year quarter.
Dollar Tree (DLTR - Free Report) currently has an Earnings ESP of +6.57% and a Zacks Rank of 3. The company is likely to register top and bottom-line growth when it reports third-quarter fiscal 2022 results. The consensus mark for DLTR’s quarterly revenues is pegged at $6.8 billion, which suggests 6.5% growth from the figure reported in the prior-year quarter.
The consensus mark for DLTR’s quarterly earnings has been unchanged in the past 30 days at $1.16 per share. The consensus estimate suggests growth of 20.8% from the year-ago quarter.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.