Gap Partners With Walmart On Home Goods: What Investors Should Know

A leading clothing retailer is teaming up with one of the world’s largest retailers for a new offering of items in the home segment.

What Happened: Gap Inc (NYSE: GPS) is set to become the first fashion retailer to partner with Walmart Inc (NYSE: WMT) in the home space.

The two retail companies signed a multiyear partnership that will bring Gap home products to Walmart stores and Walmart.com beginning June 24.

Over 400 items will be offered initially, ranging in price from $15.88 to $64.98.

Categories include home décor, tabletop, bedding and bath.

Gap will offer seasonal and special collections as part of the Gap Home partnership with Walmart throughout the year.

Related Link: What 5 Analyst Ratings Have To Say About Gap

Why It’s Important: Shares of Gap are up over 280% in the last year and up 69% year-to-date.

The company reported fourth-quarter comparable sales that were flat and online sales that were up 49% year-over-year. The fourth quarter was the third consecutive quarter with improved net sales. Total fourth-quarter sales of $4.42 billion were down 5% year-over-year.

Full-year sales of $13.8 billion were down 16% year-over-year. Comp sales were up 7% for the Old Navy brand and up 26% for the Athleta brand. The two higher margin brands represented 63% of the company’s sales.

The company’s Gap and Banana Republic brands had comparable sales declines of 6% and 22%, respectively, in the last full fiscal year.

Diversifying into the home sector could help boost the sales for the Gap brand and help continue momentum for the owned brands by The Gap Inc.

What’s Next: Gap Inc will report quarterly earnings after the market close Thursday.

GAP Price Action: Gap shares were up 2.18% at $34.76.