CIBC World Cuts Outlook on Gap Inc.

Analyst Dorothy Lakner says the retailer's fashion mix hasn't spurred buying

CIBC World cut Gap Inc. (GPS ) to hold from strong buy.

Analyst Dorothy Lakner says she was looking for an 8% same-store sales decline, adding that negative trends in traffic at Gap and Old Navy have continued despite support from new ads. Lakner says the basics problems appear to be greater than she thought: Fashion, which she thought could compensate for weak basics trends, is not yet doing the job.

Lakner adds that her confidence in improvement for the holiday now is diminished. While the stock is at a new low, there's still a chance of further estimate cuts, and higher uncertainty about the timing of a turnaround. She cut her $0.84 fiscal 2002 (Jan.) EPS estimate to $0.69, and cut the $1.30 fiscal 2003 estimate to $1.00.