Stock market analysts like to look at everything and want to connect dots and figure some thing out. There are companies that take satellite imagery of parking lots and try to figure out spending patterns. Then I read this article on MarketWatch about Gap’s analyst rating was being downgraded. Basically, the premise is there has been some executive turn over and same store sales have decreased.
It caused me to think: does a credit card promo forebode a bad quarter?
Yes!!!! Mthrfkrs got you this time!!! No cap!!!! pic.twitter.com/zwS6jmuvxL
— MilesAbound (@MilesAbound) August 1, 2015
I received an uncapped 10X offer on my Banana Republic card…on dining spending. cc @MilesAbound
— PF Digest (@PFDigest) August 3, 2015
There’s also a reddit thread with the same promo as @MilesAbound. Every one that were targeted was at the start of the new quarter for Gap. We know that as a cobranded card, some money will go back to Gap from the swipes, but would it be enough to satisfy the analysts? They could pad their numbers from the receivables from the credit card.
I’ve seen some of the financial manipulation that companies do to satisfy the street. As an example, if a company hits their numbers that they announced to the street in the current quarter, they will purposely hold sales until the new quarter begins to book the sale.
Obviously, the credit card promos are planned in advanced, and only Gap would have a better idea if their next quarter would be good or not. If heavy hitters like @MilesAbound were to utilize that promotion, they could single-handedly change Gap’s numbers. @MilesAbound is also probably the best dressed MS’er I’ve met to date. If I had that credit card, I would redeem all the points and sell the gift cards. People who buy the Gap cards would be looking for merchandise, creating lift in Gap allowing them to hit their retail metrics.
What do you think? I know the data points are low, but could these large promotions forebode a poor quarter and that is why they need to run credit card promotions? I don’t follow Gap stock so I’m not sure if their August to October quarter is a weak one or traditionally strong one, but I do know that they’ve positioned their quarters to include the holidays with a encompassing November to January.