The Gap, Inc. Second Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component The Gap, Inc. (NYSE:GPS) will unveil its latest earnings on Thursday, August 18, 2011. The Gap Inc., is an international specialty retailer that sells casual apparel, accessories and personal care products for men, women, and children.

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The Gap, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of 34 cents per share, a decline of 5.6% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from 37 cents. Between one and three months ago, the average estimate moved down, but has risen from 30 cents during the last month. For the year, analysts are projecting net income of $1.48 per share, a decline of 21.3% from last year.

Past Earnings Performance: The company has beaten estimates the last two quarters and is coming off a quarter where it topped the forecasts by one cent, reporting profit of 40 cents per share against a mean estimate of net income of 39 cents. In the fourth quarter of the last fiscal year, the company exceeded forecasts by 3 cents with profit of 60 cents versus a mean estimate of net income of 57 cents.

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Wall St. Revenue Expectations: On average, analysts predict $3.35 billion in revenue this quarter, a rise of 0.9% from the year ago quarter. Analysts are forecasting total revenue of $14.79 billion for the year, a rise of 0.9% from last year’s revenue of $14.66 billion.

Analyst Ratings: Analysts seem relatively indifferent about Gap with 20 of 28 analysts surveyed maintaining a hold rating.

Key Stats:

A year-over-year revenue decrease in the first quarter snaps a streak of three consecutive quarters of revenue increases. Revenue fell 1% in the first quarter and rose 3%in the fourth quarter of the last fiscal year, 1.8% in the third quarter of the last fiscal year and 2.2% in the second quarter of the last fiscal year.

The decrease in profit in the first quarter comes after net income rose in the previous quarter. In the first quarter, net income fell 22.8% to $233 million. In the fourth quarter of the last fiscal year, net income rose 3.7%.

Competitors to Watch: Urban Outfitters, Inc. (NASDAQ:URBN), Abercrombie & Fitch Co. (NYSE:ANF), The Buckle, Inc. (NYSE:BKE), American Eagle Outfitters (NYSE:AEO), Aeropostale, Inc. (NYSE:ARO), Children’s Place Retail Stores, Inc. (NASDAQ:PLCE), Nordstrom (NYSE:JWN), J.C. Penney (NYSE:JCP) and The Wet Seal, Inc. (NASDAQ:WTSLA).

Stock Price Performance: During May 18, 2011 to August 12, 2011, the stock price had fallen $6.45 (-28.1%) from $22.94 to $16.49. The stock price saw one of its best stretches over the last year between February 2, 2011 and February 18, 2011 when shares rose for 13-straight days, rising 21.1% (+$3.97) over that span. It saw one of its worst periods between May 31, 2011 and June 6, 2011 when shares fell for five-straight days, falling 8.1% (-$1.56) over that span. Shares are down $5.30 (-24.3%) year to date.

(Source: Xignite Financials)

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