What To Expect From Gap’s (GPS) Q2 Earnings

Clothing and accessories retailer The Gap (NYSE:GPS) will be announcing earnings results tomorrow afternoon. Here’s what you need to know.

Gap beat analysts’ revenue expectations by 3.1% last quarter, reporting revenues of $3.39 billion, up 3.4% year on year. It was a stunning quarter for the company, with an impressive beat of analysts’ earnings estimates.

Is Gap a buy or sell going into earnings? Read our full analysis here, it’s free.

This quarter, analysts are expecting Gap’s revenue to grow 2.3% year on year to $3.63 billion, a reversal from the 8% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.41 per share.

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Gap has missed Wall Street’s revenue estimates three times over the last two years.

Looking at Gap’s peers in the apparel and footwear retail segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Urban Outfitters delivered year-on-year revenue growth of 6.3%, beating analysts’ expectations by 1%, and Boot Barn reported revenues up 10.3%, topping estimates by 1.6%. Urban Outfitters traded down 9.5% following the results while Boot Barn was up 13.7%.

Read our full analysis of Urban Outfitters’s results here and Boot Barn’s results here.

Investors in the apparel and footwear retail segment have had steady hands going into earnings, with share prices flat over the last month. Gap is up 7.8% during the same time and is heading into earnings with an average analyst price target of $28.2 (compared to the current share price of $24.56).

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