Why Investors Should Be Wary of Apparel Stocks Like Gap

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Real MoneyStock of the Day Gap posted weak earnings after the bell Thursday night. 

Jeff Marks, senior portfolio analyst for Jim Cramer's Action Alerts PLUS investing club, weighed in on what Gap's earnings mean for the apparel makers. 


"It's a tough group right now because kind of like as what we're going to see with the market distinguished between the winners and losers, you're going to see that too. So on the margin side, the companies that can maintain their margins are going to be the ones that already moved out of China. And then hopefully also moved out of, perhaps, Mexico to just basically what's going on here. So you'll get winners and losers there," Marks said.

"From the same store sales side--Gap (GPS) - Get Report --negative 10 comps. That's really poor. So what I would say is if you also want to follow the trends and follow where people are actually shopping because that will help you distinguish between the winners and losers as well with who can actually produce positive same-store sales in this environment and who's just kind of stuck in reverse right now," said Marks. 

Related. Gap Shows Large Price Gap to the Downside: What's Next?

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