Gap Survives Supply Chain Woes

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Gap Survives Supply Chain Woes

Shares of Gap (NYSE: GPS) jumped 7.58% in after-hours trading on Thursday after the clothing and accessories retailer posted positive earnings.

Financials: Gap reported a loss of 2 cents per share and revenue of $4.5 billion in the quarter; both were better than expected.

The Good: Operating expenses for Gap reached $1.5 billion, which was better than expected. This was due to strong demand generation and new technologies.

The Bad: The gross margin was only 33.7% in the quarter. Gap attributed this, in part, to the higher cost of air freight, which the company had to turn to because…

Supply Chain Problems: Gap was hit with some supply chain problems in the quarter, especially Gap’s subsidiary, Old Navy.

Outlook: Despite the challenges, Gap is bullish about the future. Guidance for the current quarter includes revenue down by the mid to high-single digits, which was better than expected.

Quote: “As our teams address near-term disruption from the acute headwinds that muted our fourth quarter performance, we are confident in our ability to execute against our long-term strategy, capitalizing on our investments in demand-generation, customer loyalty and artificial intelligence to accelerate profitable growth.” - GAP CEO Sonia Syngal.

Final Thoughts: Despite supply chain issues, Gap’s business was good during the quarter. The stock is down 43% in the past 12 months.

Notables

Notable Earnings Today: Hibbett (Nasdaq: HIBB), inTEST (NYSEAMERICAN: INTT), Rapid Micro Biosystems (NASDAQ: RPID), OFS Capital (Nasdaq: OFS), Agilon Health (NYSE: AGL), Algonquin Power & Utilities (NYSE: AQN).

Notable IPOs Today: 10X Capital Venture Acquisition Corp. III (NYSE: VCXB), Gores Holdings IX, Inc. Class A Common Stock (Nasdaq: GHIX), Papaya Growth Opportunity Corp. I Class A Common Stock (Nasdaq: PPYA), Industrial Tech Acquisitions II, Inc. Class A Common Stock (Nasdaq: ITAQ).

Notable Equity Crowdfunding Campaigns Ending Today: Troop Beverage (Republic), CTXMarket (TruCrowd), Raindrop Texting Solutions (TruCrowd), HoloGear (Wefunder), SlauterHouse Brewing (MainVest), 2LC Bakery (Honeycomb), KhemoSafe (TruCrowd).

Notable Economic Events Today: Unemployment rate (8:30 a.m. ET), Nonfarm Payrolls (8:30 a.m. ET), Average hourly earnings (8:30 a.m. ET), Labor force participation rate (8:30 a.m. ET).

Disney Reportedly Considers Ad-Supported Tier for Disney+

Disney (NYSE: DIS) is thinking about launching a low-cost, advertiser-supported tier for its Disney+ streaming service, according to a report from The Information on Thursday.

Details: While Disney has not confirmed the details, the report said that this new tier would be created so that the company can achieve profitability for its streaming business by 2024.

Big Picture: Several other legacy entertainment companies with streaming services already offer ad-supported tiers for users.

Final Thoughts: Shares of Disney are down 21% in the past 6 months.

3 Space ETFs to Consider

If you are interested in investing in a space stock, here are three exchange-traded funds (ETFs) that you can check out.

Be a Pro: Procure Space ETF (Nasdaq: UFO) invests in companies involved in telecommunication, tech, and rockets. The ETF is down 19% in the past 12 months.

Join the Ark: The ARK Space Exploration & Innovation ETF (BATS: ARKX) invests in aerospace, defense, and logistics companies. The ETF is down 17% in the past 12 months.

SPDR-Man: The S&P Kensho Final Frontiers ETF (NYSEARCA: ROKT) invests in electronics, defense, and aerospace. The ETF is down 4% in the past 12 months.

Final Thoughts: An ETF is a low-cost way to diversify an investment portfolio.

Trend to Watch

Coming to America: Panasonic plans new massive battery plant in U.S. to supply Tesla (Reuters)

Ahead of the Curve: Lugano, Switzerland Will Make Bitcoin Legal Tender (Bitcoin Magazine)

The Revolt is Still Here: The Retail Investor Spring Continues a Year After Reddit Played Wall Street (The Street)

Communicating Growth: Verizon CEO sees strong growth ahead, says growing dividend is still a top priority (CNBC)

Inflation: Costco membership fees could increase later this year for the first time since 2017 (USA Today)

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