The Gap Inc. (GPS)’s Future Is With the BRICs: Abercrombie & Fitch Co. (ANF), Guess?, Inc. (GES)

Despite losses in sales internationally in 2012, Gap’s share price gained a market-trouncing 67.33%. Compared to some of Gap’s main competitors, such as Abercrombie & Fitch Co. (NYSE:ANF) who also suffered from a decrease in international sales and a decrease in share price of 1.78% over the past year, or Guess?, Inc. (NYSE:GES) who really suffered last year with a decrease in share price by 17.71%.

Gap still carries a price-to-earnings ratio of 16, which is pretty cheap for the clothing retail industry, where the average P/E comes in at 24. Like Gap, Abercrombie & Fitch may be undervalued with a P/E of 14.  However, Abercrombie & Fitch expanded their international brand by opening 40 new stores outside of the USA, at the expense of closing 47 stores inside the USA. Additionally, Abercrombie & Fitch has not been able to bounce back from a depressing 2012 fiscal year with about a 0% increase in share price since January 28, 2013. But even Abercrombie & Fitch must feel relieved that they are not Guess? With 37% of their business tied up in Europe, it is unlikely that Guess?, Inc. (NYSE:GES) will be able to reverse the 14% loss in share price from last year.

Bottom line

In comparison to Abercrombie & Fitch and Guess?, Gap seems to be starting off on the right foot in 2013. Despite incredible gains, Gap shares have plenty of room to grow. With all these new international expansion plans, Gap shareholders have a lot to look forward to, especially when their rivals are struggling to keep up. That is why I predict that Gap will outperform the market in 2013 on my CAPS page.

The article Gap’s Future Is With the BRICs originally appeared on Fool.com and is written by Nadine Gibson.

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