Despite Near-Term Headwinds, Gap’s Value Proposition Still Resonates; Shares a Touch Undervalued
With merchandise margins that were weaker than anticipated and operating expense deleverage of 120 basis points (to 31.7%), we think investors are concerned that no-moat Gap’s rectification of prior inventory and operating challenges could remain ongoing. However, commentary that merchandise margin pressure should begin to alleviate in the second quarter, combined with inventory that ticked up less than 4% versus a sales increase of 10%, gives us confidence that efforts to deliver right-sized pr...The Gap is an apparel retail company. The company provides apparel, accessories, and personal care products for men, women, and children under the Old Navy, Gap, Banana Republic, Athleta, Intermix, and Hill City brands. The company has stores in the U.S., Canada, the U.K., France, Ireland, Japan, Italy, China, Hong Kong, Taiwan, and Mexico, and has franchise agreements with unaffiliated franchisees to operate Old Navy, Gap, and Banana Republic stores throughout Asia, Europe, Latin America, the Middle East, and Africa. Under these agreements, third parties operate stores that sell apparel and related products under the company's brand names.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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