The shares of leading lifestyle brands retailer The Gap (GPS) have jumped 31.3% in price year-to-date thanks to its blockbuster second-quarter earnings and improved fiscal 2021 guidance. And given the company’s ongoing digital transformation efforts and strategic moves to increase its brand awareness, is the stock’s price poised to climb further? Read on.Clothing and accessories retailer The Gap, Inc. (GPS) sells apparel, accessories, and personal care products under the Old Navy, Gap, Athleta, and the Banana Republic brands internationally. Last week, the San Francisco-based specialty apparel company delivered its highest second-quarter net sales in more than a decade. The company’s strong sales growth across its Old Navy and Athleta brands and accelerated marketing investments have helped its stock gain 31.3% in price year-to-date. In addition, GPS’ comparable sales rose 3% year-over-year and were up 12% versus 2019 in the second quarter of 2021. Moreover, GPS raised its full-year 2021 guidance.
Although COVID-19 related store closures resulted in a roughly 2% sales decline versus 2019, GPS’ focus on strategic category expansion and acquisition in markets outside of the United States should drive its growth in the long run.
Furthermore, as fall approaches, its initiatives to digitally transform GPS and boost its online sales should help it deliver market-beating returns in the near term.