Gap (GPS) Stock Falls in After-Hours Trading on April Sales Data

NEW YORK (TheStreet) -- Shares of Gap (GPS) were falling 2.2% to $38.98 after-hours Monday after the clothing retailer reported sales data for April and the fiscal first quarter of 2015.

The retailer said that sales for the month of April fell to $1.21 billion from $1.33 billion in the year-ago month. Gap said that sales fell to $3.66 billion in the fiscal first quarter from $3.77 billion in the year-ago quarter.

Comparable store sales for Gap brand fell 15% in April, compared 3% growth in the year-ago month. Banana Republic comparable store sales fell 15%, compared to 7% in April 2014. Old Navy comparable store sales fell 6%, compared to 17% growth in the year-ago month.

Comparable store sales for Gap brand fell 10% in the fiscal first quarter, compared a 5% fall in the year-ago quarter. Banana Republic comparable store sales fell 8%, compared to a 1% fall in the year-ago quarter. Old Navy comparable store sales grew 3%, compared to 1% growth in the year-ago quarter.

TheStreet Ratings team rates GAP INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate GAP INC (GPS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, reasonable valuation levels, good cash flow from operations and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 12.1%. Since the same quarter one year prior, revenues slightly increased by 2.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Specialty Retail industry and the overall market, GAP INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $1,015.00 million or 34.97% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 20.86%.
  • 38.45% is the gross profit margin for GAP INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 6.77% trails the industry average.
  • You can view the full analysis from the report here: GPS Ratings Report
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