Gap's (GPS) Strategic Endeavors Look Good: Time To Hold?
Zacks Investment Research | Jun 07, 2017 10:54PM ET
The Gap, Inc. (NYSE:GPS) seems to be picking pace as it remains on track with its strategic growth endeavors and turnaround efforts, which are reaping benefits. The company’s strategic plans mainly focus on keeping track with the accelerated pace of change in the apparel industry. The company intends to speed up its transformation plan by bringing meaningful changes to its product portfolio and operating capabilities worldwide.
As part of enhancing its product portfolio, the company is focused on growing its brands in regions which offer greater structural advantage and potential to expand market share, while closing the underperforming stores. This is expected to result in nearly 75 store closures.
Additionally, the company remains keen on streamlining its operating model by creating a more proficient global brand structure. While these actions are likely to attract annualized sales loss and restructuring charges, they are anticipated to deliver annualized pre-tax savings of $275 million and operating margin growth of about two percentage points. Clearly, Gap remains committed to position itself better for long-term growth by setting its priorities right and channelizing its resources accordingly.
Further, these initiatives have helped the company outperform broader industry in the past one year. Shares of Gap increased 14.6% and fared better than the Zacks categorized Zacks Investment Research
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