Gap (GPS) Q3 Earnings Report Preview: What To Look For

Petr Huřťák /
2023/11/15 2:34 am EST

Clothing and accessories retailer The Gap (NYSE:GPS) will be reporting results tomorrow after market close. Here's what to expect.

Last quarter Gap reported revenues of $3.55 billion, down 8% year on year, missing analyst expectations by 1.2%. It was a mixed quarter for the company, with an impressive beat of analysts' earnings and free cash flow expectations. That really stood out as a positive in these results. On the other hand, the company's revenue missed analysts' expectations and it lowered its full-year revenue guidance, although Gap does expect its gross margin to improve.

Is Gap buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Gap's revenue to decline 10.7% year on year to $3.61 billion, a deceleration on the 2.4% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.20 per share.

Gap Total Revenue

The analysts covering the company have been growing increasingly bullish about the business heading into the earnings, with revenue estimates seeing three upwards revisions over the last thirty days. The company missed Wall St's revenue estimates five times over the last two years.

Looking at Gap's peers in the apparel and footwear retail segment, only Boot Barn has so far reported results, delivering top-line growth of 6.5% year on year, missing analyst estimates by 0.8%. The stock traded down 6.2% on the results.

Read our full analysis of Boot Barn's earnings results here.

Investors in the apparel and footwear retail segment have had steady hands going into the earnings, with the stocks up on average 1.3% over the last month. Gap is up 11.2% during the same time, and is heading into the earnings with analyst price target of $12.6, compared to share price of $13.85.

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The author has no position in any of the stocks mentioned.