A Few Reasons Why Gap Could Be A Good Investment

Fashion retailers suffered during the holiday season as footfall at malls decreased and the colder weather kept customers at home. Moreover, weak consumer confidence also took a toll on apparel retailers’ sales. Nonetheless, there were retailers who managed to buck the trend by undertaking various strategies such as offering deep discounts and tapping the latest fashion trends which lured customers to stores.

A typical example in this context is Gap (GPS), which followed this strategy and witnessed a better holiday season. Its fourth-quarter results came in ahead of the Street’s expectations, sending its stock price north.

The Efforts Paid Off

Revenue dropped 3.2% to $4.58 billion over the prior year’s quarter, mainly because of one less week due to a calendar shift. In fact, the retailer managed to attract customers by promoting its products heavily. This led to a same store sales growth of 1%. Gap was able to sell its products more than other retailers, mainly because it caters to all age groups, including men, women and children. Also, it taps into hot fashion trends by providing products according to the changing tastes and preferences of people.

Continue Reading at GuruFocus

— Guru Focus

You May Also Like

About the Author: Guru Focus