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The Gap (GPS)

The Gap (GPS)
Mind the gap between the train and the train station platform

The San Francisco-headquartered chain known for selling khakis and chinos has seen its stock nearly double year-to-date. GPS stock is up 84% since the first trading day of 2021 and currently sits around $35. The Gap’s stock price has outperformed most other retailers and the major stock indexes by a wide margin and continues to trend higher as investors play the economic reopening trade.

Gap’s stock rally is an extension of its continued efforts to amplify growth at its Old Navy and Athleta brands. In a recent event, the company signed a long-term deal with Simone Biles to endorse its Athleta brand.

The company’s Power Plan 2023 focuses on opening highly profitable Old Navy and Athleta stores while closing the underperforming Gap and Banana Republic stores. As part of the plan, the company expects the Old Navy and Athleta brands to contribute about 70% of sales by 2023.

This clothing chain is expected to post quarterly earnings of $0.17 per share in its upcoming report, representing a year-over-year change of +106.8%. Revenues are expected to be $3.41 billion, up 61.7% from the year-ago quarter.

The company is scheduled to report first-quarter earnings on May 27. Better-than-expected results could send GPS stock even higher.

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