Gap: Analyst begs board to change name to Old Navy

People pass by the GAP clothing retail store in Manhattan.Reuters/Eduardo Munoz

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A group of Wall Street analysts is begging Gap‘s board of directors to consider a name change because of rising momentum at Old Navy. 

In a note sent out to clients on Friday title “Dear B.O.D. of GPS… Please Change Name of Company to Old Navy,” a team of Jefferies analysts led by Randal Konik said the Gap brand doesn’t matter and that it’s the company’s lower-priced brand that’s doing the heavy lifting. 

“The Gap brand remains challenged, but better EPS and reaffirmed guide shows the Gap brand doesn’t matter, the team said. “Old Navy comps remain solid and Athleta continues to grow.”

They added: “The +5% comp beat cons. and marks the third consecutive+DD% 2-yr comp. The concept gained share, strength was broad-based, and traffic outpaced the industry. Momentum should continue with plus-size and ongoing remodels.”

Gap on Thursday posted adjusted earnings of $0.76 cents a share, beating the Wall Street consensus of $0.72 cents, according to Reuters. Net sales of $4.09 billion topped the $4.01 billion that was expected thanks to rising sales at Old Navy.

Same-store sales at Old Navy rose 5% year-over-year, easily beating the 4.5% growth analysts were anticipating. That offset weakness at Gap stores, which saw comparable sales slump 5% YoY, worse than the 2.55% decline that was expected.

Shares plunged nearly 7% in after-hours trading on Thursday.

“We are buyers on any weakness at the open,” Konik’s team wrote. They have a $50 price target — more than 50% above where shares are currently trading.