By Kimberly Chin
Gap Inc. is scheduled to report results for its fiscal fourth quarter postmarket on Thursday. Here’s what you need to know:
EARNINGS FORECAST: Analysts on average expect a loss of 15 cents a share, or 13 cents as adjusted, compared with a profit of 16 cents a share in the same quarter a year ago on a reported and adjusted basis, according to FactSet. Gap will hold its investor call around 5 p.m. ET.
REVENUE FORECAST: Analysts expect $4.49 billion, per FactSet, compared with the $4.42 billion Gap reported a year earlier.
WHAT TO WATCH:
PROMOTIONS: Gap may have been more promotional during the holiday quarter compared with other retailers, MKM Partners analysts note, citing its own checks. Combined with product delays and higher supply chain costs, this could weigh on sales and margins, MKM Partners said. “We believe gross margin is at risk even as supply chain costs dissipate as maintaining the extent of full-price selling in 2021 will likely be tough,” MKM Partners added.
2022 OUTLOOK: Analysts at UBS believe that Gap will report weak 2022 guidance, below analysts’ consensus projections of $1.76 earnings per share. “We think the street is underestimating the impact of continued supply chain costs into the first half of FY22 as well as some degree of more normalized promotions in FY22,” UBS said.
Write to Kimberly Chin at [email protected]
