Gap Inc

GAP: XNYS (USA)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	$48.10	Nntq	Bltrtfqnk

No-Moat Gap Cuts Costs and Reorganizes as It Seeks a CEO and Stability; Shares Undervalued

David Swartz

Mar 10, 2023

Closing a painful year, Gap underperformed our modest expectations in 2022’s fourth quarter. Moreover, its guidance for a mid-single-digit percentage sales decline in 2023 is disappointing. Even so, we are encouraged that the firm (even with an interim CEO) is not standing still as, in conjunction with the earnings report, it announced $300 million in cost savings in addition to the $250 million identified last year. Moreover, Gap has made major organizational and personnel changes and expects to name a permanent CEO soon.

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