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Gap (GPS) to Retain Iconic Name Post Old Navy Spin-off
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The Gap Inc. (GPS - Free Report) stated that it will retain the iconic name for the new public company, presently referred to as NewCo, post Old Navy spin-off.
The new Gap Inc. will house brands, namely Gap, Banana Republic, Athleta, Hill City, Intermix, and Janie and Jack. Meanwhile, Old Navy, which is among the fast-growing apparel brands, is likely to operate under the existing name as a standalone company.
The transaction, which is expected to close in 2020, is subjected to some conditions that also include final approval from Gap’s board of directors. Earlier, management had stated that after the spin-off, Gap’s shareholders will receive a pro-rata stock distribution and as a result is expected to own shares in both the resultant companies equally.
Further, industry experts believe that the spin-off will enable the two stand-alone companies to better capitalize growth opportunities. Previously, management had also stated that the new Gap Inc. is expected to generate roughly $9 billion revenues annually, whereas Old Navy is likely to generate about $8 billion revenues.
Going forward, this Zacks Rank #3 (Hold) company remains encouraged about the prospects of the new Gap Inc., thus deliver higher sales and profitability.
We note that Gap’s powerhouse brand, Old Navy, which is focused on creating affordable high-quality fashion for the whole family, remains a significant long-term growth opportunity. Although comparable sales (comps) at Old Navy fell 5% in second-quarter fiscal 2019, the company remains confident about the brand’s growth in the back half.
Additionally, Gap has been experiencing significant progress in its smaller brands. Gap’s digitally native men's active brand, Hill City, is consistently developing and remains a great growth opportunity for the company. Furthermore, Gap continues to benefit from the Janie and Jack clothing brand, backed by roughly 140 U.S. locations and a profitable online channel.
Price Performance
In a year, shares of Gap have lost 47.4%, narrower than the industry’s 50.9% decline. The decline in stock price is attributed to persistent softness across the company’s namesake brand for quite some time now.
Fossil Group, Inc. (FOSL - Free Report) delivered positive earnings surprise of 79% in the last four quarters. The stock currently has a Zacks Rank #2 (Buy).
Ulta Beauty, Inc. (ULTA - Free Report) has a long-term earnings growth rate of 18.4% and a Zacks Rank of 2.
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The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
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Gap (GPS) to Retain Iconic Name Post Old Navy Spin-off
The Gap Inc. (GPS - Free Report) stated that it will retain the iconic name for the new public company, presently referred to as NewCo, post Old Navy spin-off.
The new Gap Inc. will house brands, namely Gap, Banana Republic, Athleta, Hill City, Intermix, and Janie and Jack. Meanwhile, Old Navy, which is among the fast-growing apparel brands, is likely to operate under the existing name as a standalone company.
The transaction, which is expected to close in 2020, is subjected to some conditions that also include final approval from Gap’s board of directors. Earlier, management had stated that after the spin-off, Gap’s shareholders will receive a pro-rata stock distribution and as a result is expected to own shares in both the resultant companies equally.
Further, industry experts believe that the spin-off will enable the two stand-alone companies to better capitalize growth opportunities. Previously, management had also stated that the new Gap Inc. is expected to generate roughly $9 billion revenues annually, whereas Old Navy is likely to generate about $8 billion revenues.
Going forward, this Zacks Rank #3 (Hold) company remains encouraged about the prospects of the new Gap Inc., thus deliver higher sales and profitability.
We note that Gap’s powerhouse brand, Old Navy, which is focused on creating affordable high-quality fashion for the whole family, remains a significant long-term growth opportunity. Although comparable sales (comps) at Old Navy fell 5% in second-quarter fiscal 2019, the company remains confident about the brand’s growth in the back half.
Additionally, Gap has been experiencing significant progress in its smaller brands. Gap’s digitally native men's active brand, Hill City, is consistently developing and remains a great growth opportunity for the company. Furthermore, Gap continues to benefit from the Janie and Jack clothing brand, backed by roughly 140 U.S. locations and a profitable online channel.
Price Performance
In a year, shares of Gap have lost 47.4%, narrower than the industry’s 50.9% decline. The decline in stock price is attributed to persistent softness across the company’s namesake brand for quite some time now.
3 Better-Ranked Retail Stocks
Boot Barn Holdings, Inc. (BOOT - Free Report) delivered average positive earnings surprise of 26.1% in the trailing four quarters. Currently, the stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Fossil Group, Inc. (FOSL - Free Report) delivered positive earnings surprise of 79% in the last four quarters. The stock currently has a Zacks Rank #2 (Buy).
Ulta Beauty, Inc. (ULTA - Free Report) has a long-term earnings growth rate of 18.4% and a Zacks Rank of 2.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.
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