Gap (GPS) Crushed After Hours; Reports Huge COGS Increases
"[T]he company expects business performance during fiscal year 2011 to be heavily impacted by pressure from sourcing cost inflation, particularly in its value channels. While the company anticipated that the cost of goods would increase during the back half of the year, costs are actualizing above the initial estimates. The company now expects product costs per unit to be up about 20 percent in the back half of the year, which will more than outweigh retail price increases."I predicted this in November 2010: inflation is bad, not good for corporate profits and equity valuations.
No comments:
Post a Comment