Companies offering experience, specialization, and convenience continue to take share of consumers' wallets.
Quarterly results indicate the turnaround remains stalled with no catalyst to drive earnings in sight.
We expect the shares will trend lower in the long term, given growth and business opportunities.
Same-store sales continue to rise at Old Navy and decline at Gap.
Near-term results crimp operating income, but our long-term forecast remains intact.
Efficient marketing, tactical promotions, and smart partnerships have motivated consumers to participate in the narrow-moat firm's umbrella of brands.
New CEO Marvin Ellison is altering the wide-moat business by winding down the Orchard Supply brand and introducing an inventory rationalization plan.
Despite good second-quarter results, we still anticipate pricing gains to be difficult for the no-moat retailer during the next decade, pressuring gross margins.
The narrow-moat retailer has modest pricing power from its brand equity and has successfully cultivated synergies between its full- and off-price segments.