Retail Roundup: Gap’s Mad Money from Mad Men
Gap (NYSE:GPS) can officially say it’s Mad Men collection at Banana Republic was a hit for both fashionistas and financiers alike. Banana Republic’s Mad Men collection, which initially debuted in August 2011 and was brought back in March 2012 thanks to its initial success, helped Gap Inc. deliver positive first quarter earnings.
The company reported first quarter earnings per share of 47 cents – an 18 percent increase over last year’s first quarter earnings per share of 40 cents. Net sales were up 6 percent, and comparable sales were up 4 percent. Gap Inc. also announced it will give its shareholders a dividend of $0.125 per share payable on or after July 24, 2012, an increase of 11 percent compared with the first quarter last year.
A Closer Look: Gap Earnings Cheat Sheet>>
Currently, Gap’s (NYSE:GPS) trailing P/E ratio is at 16.85. On a relative basis to a couple of its competitors like American Eagle’s (NYSE:AEO) 24.04 trailing P/E and Abercrombie & Fitch’s (NYSE:ANF) 29.92 trailing P/E, value investors may continue to see value in Gap relative to its peers in today’s market. In trading, the P/E ratio of a stock (i.e. P/E) is a measure of the price paid for a share relative to the annual earnings per share. The lower the P/E, the more value investors see when analyzing an investment decision.
As for Gap Inc.’s (NYSE:GPS) next big fashion collaboration? Check out Banana Republic’s limited edition collaboration with designer Trina Turk featuring a collection of southern California inspired summer essentials. The collection will be available in stores and online beginning June 2012. Will the Banana Republic Trina Turk Collection be coveted enough to help deliver second quarter results as positive as Gap Inc’s (NYSE:GPS) first quarter results?