KeyBanc's Yruma credits Murphy for much of the company's recent success. "People have a very positive bias on the leadership team, I think they have done a great job controlling expenses and building the business for the longer term."
Further, Konik added, "Murphy has made a huge effort to include talent that have to do with product, which has been hugely important."
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In response to questions about the turnaround, Murphy issued the following statement to CNBC: "Gap Inc. has been executing its strategic plan to become a global retailer with a dominant portfolio of brands since 2008. We've made meaningful progress each year, and we're pleased that investors have taken notice, especially since early last year."
In fact, over the past two years, Gap shares have returned 78 percent to investors, double the S&P Retail Index's performance. Over the past five years, Gap shares rose 127 percent, better than the S&P Retail Index's 96-percent gain, though not as strong as competitor L Brands (formerly Limited Brands), whose shares have grown 185 percent over that same time period.
The company has streamlined its leadership in all of its brands and channels. In 2007, there were six presidents for each of its retail store brands—one for every channel (specialty, outlet, franchise, online, North America, and global). Now, there is one president per brand. Each president is in charge of all brand channels, which substantially improves brand consistency in a so-called omnichannel world, where the lines between shopping online, on mobile devices, and at traditional stores have become blurred.
"When you click on Gap today, you are not only getting Gap, you're getting Old Navy, you're getting Banana Republic, you're getting Piperlime, all in one website, all in one shopping basket, and we think that's a huge differentiator relative to competitors," said Yruma.
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While Gap, Banana Republic and Old Navy are the company's three strongest brands, yoga apparel brand Athleta, online accessory brand Piperlime and recently acquired, high-end boutique Intermix are what Murphy described to shareholders as "incubation" brands. The three youngest leverage the strength and the knowledge of their older siblings.
Konik recently raised his price target from $51 to $56 dollars per share, pegging $5 to $10 of incremental value attributable to Athleta.
"The biggest underappreciated part of the story that no one talks about is that Altheta is support by the Gap mothership. They have a ton of cash, cash flow and a huge marketing budget and real estate expertise. We expect them to put stores near Lululemon stores," Konik told CNBC.