Stagflation Victim: Gap, Inc. (GPS)
Prime stagflation victim is Gap, Inc. (GPS) which operates retail clothing stores like Gap and Old Navy. The lower end clothing lines have been victim of higher input costs such as cotton (and of course fuel for transport) which has squeezed margins. Meanwhile, consumers are tight because of no wage growth and higher food & energy costs. Hello stagflation.
This is no surprise and is a story that we should continue to see play out. Who are the companies doing well? The multinationals that have pricing power and a global reach. The companies struggling are the ones dependent on the US consumer, minimal pricing power and impacted heavily by higher costs.
Gap is down something like 17% as of writing this article. Ouch.