Shares of Gap gapped lower on Wednesday after the clothing retailer posted third-quarter earnings that missed Wall Street forecasts, prompting at least one analyst to issue a downgrade.
San Francisco-based Gap posted third-quarter per-share earnings of 25 cents after the closing bell on Tuesday, down from 37 cents in the year-ago quarter and below the 27 cents expected by analysts polled by FactSet.
Sales at the company's namesake stores as well as its Banana Republic, Old Navy and Athleta brands rang in at $3.99 billion, helped in part by a 61% jump in online sales, though that was offset by a 20% drop in brick-and-mortar sales.
The less-than-stellar earnings prompted at least one analyst downgrade. Citi analyst Paul Lejuez downgraded Gap to neutral from buy with a one-year price target of $27, down from $30.
Lejuez’s downgrade followed Gap CEO Sonia Syngal’s post-earnings remarks to analysts that fourth-quarter sales are likely to ring in flat or just slightly higher than last year, in large part due to ongoing pandemic-related uncertainty.
Meantime, B. Riley Securities analyst Susan Anderson took the opposite tact, raising her price target on Gap to $22 from $20 on optimism that consumer spending is rebounding faster than expected, warranting a higher multiple on retailers in general.