Gap shares rose 4.9% on Thursday as the apparel retailer announced plans to hire seasonal employees to meet shopping demand ahead of the peak holiday season. The seasonal workers will be deployed at fulfillment and customer contact centers as well as at Old Navy, Gap, Banana Republic, Athleta, Intermix and Janie and Jack stores.
Gap (GPS) did not disclose how many employees it seeks to hire but according to MarketWatch, the company is looking for an additional 10,000 workers for support during the holiday season. The retailer has hired over 50,000 employees in the first half of the year.
The hiring need comes amid a surge in e-commerce sales as more customers are shopping online since the COVID-19 outbreak. Even after the partial reopening of stores following the easing of lockdown restrictions in some locations, several retailers continue to experience strong online trends.
Gap acquired 3.5 million new customers through its online channels in fiscal 2Q. The company’s fiscal 2Q online sales surged 95% Y/Y and offset the 48% decline in its store sales to some extent. Overall, Gap’s 2Q sales fell 18% to $3.28 billion reflecting the impact of temporary store closures.
On Sept. 1, Morgan Stanley analyst Kimberly Greenberger increased the stock’s price target to $16 from $11 but maintained a Hold rating. Greenberger said that following the recent earnings report she is “more constructive” on the second half of this year and the long-term forecast given management’s “revitalized approach to the business.”
However, the analyst continues to assume that the Gap brand and Banana Republic will not recover to 2019 sales levels due to store closures and “deteriorating consumer relevance,” while she sees Old Navy and the “Other” segment, primarily Athleta, topping 2019 revenue levels by 2021. (See GPS stock analysis on TipRanks)
Overall, the Street has a Hold analyst consensus for Gap based on 3 Buys, 12 Holds and 1 Sell rating. The average analyst price target of $18.20 indicates modest upside potential of about 2% in the coming year. The stock is up 1.1% year-to-date.