Shares of Gap Inc (NYSE:GAP) are up 1.1% to trade at $21.91 this morning, after the retailer nudged past second-quarter earnings estimates with $0.57 per share, but came in below revenue expectations at $3.73 billion. Like other apparel brands, the San Francisco-based company faces pressure from potential tariffs, along with weakness at its women's athletic wear subsidiary, Athleta. Offsetting those challenges, steady performance from Banana Republic, Old Navy, and its namesake label have helped manage costs and support the company's outlook for the rest of the year.
GAP has been on a steady climb since the start of the month, now on track for its seventh win in eight sessions and a fourth-straight weekly gain. The shares have been struggling to recover from their May 30 bear gap of 20.2%, and are still trading around those levels. The 60-day moving average, which acted as firm resistance February-April, has moved in a support this week, however.
Analysts remain split on Gap's outlook. Of the 17 firms covering the stock, six rate it a "buy" or better, while the remainder recommend a "hold." Jefferies, Telsey Advisory Group, and Wells Fargo Securities recently chimed in with bear notes, while J.P. Morgan Securities and BofA Global Research Securities lifted their price targets.
Options traders are leaning bearish today, with 14,000 puts traded so far -- six times the typical volume at this point in the session. The weekly 8/29 21-strike put is a top choice, with new positions opening there.
