GAP Q3 2025 Earnings Report

GAP EPS Results

• Actual EPS: $0.72
• Consensus EPS: $0.56
• Beat/Miss: Beat by +$0.16
• One Year Ago EPS: $0.59

GAP Revenue Results

• Actual Revenue: $3.83 billion
• Expected Revenue: $3.81 billion
• Beat/Miss: Beat by +$20.79 million
• YoY Revenue Growth: +1.60%

GAP Announcement Details

• Quarter: Q3 2025
• Date: 11/21/2024
• Time: After Market Closes
• Conference Call Date: Thursday, November 21, 2024
• Conference Call Time: 5:00PM ET

GAP (NYSE:GAP), Inc. operates as a global apparel retail company, which offers clothing, apparel, accessories, and personal care products for men, women, and children. The firm operates through the following segments: Gap Global, Old Navy Global, Banana Republic Global, Athleta, and Other. The Gap Global segment includes apparel and accessories for men and women under the Gap brand, along with the GapKids, BabyGap, GapMaternity, GapBody, and GapFit collections. The Old Navy Global segment offers clothing and accessories for adults and children. The Banana Republic Global segment provides clothing, eyewear, jewelry, shoes, handbags, and fragrances. The Athleta segment offers fitness apparel for women. The company founded by Donald G. Fisher and Doris F. Fisher in July 1969 and is headquartered in San Francisco, CA.

GAP Q3 2025 Earnings Call Transcript

Presentation

[Operator]

Good afternoon, ladies and gentlemen. I would like to welcome everyone to the Gap Inc. 3rd quarter 2024 Earnings Conference Call. At this time, all participants are in a listen only mode. For those analysts who wish to participate in the question and answer session after the presentation, you may now press star 1 to enter the Q and A queue.

[Operator]

As a reminder, please limit your questions to 1 per participant. I would now like to introduce your host, Whitney Notaro, Head of Investor Relations.

[Whitney Notaro, Head Of Investor Relations at The Gap Inc]

Good afternoon, everyone. Welcome to Gap Inc. Q3 fiscal 2024 earnings conference call. Before we begin, I'd like to remind you that the information made available on this conference call contains forward looking statements that are subject to risks that could cause our actual results to be materially different. For information on factors that could cause our actual results to differ materially from any forward looking statements, please refer to the cautionary statements contained in our latest earnings release.

[Whitney Notaro, Head Of Investor Relations at The Gap Inc]

The risk factors described in the Company's annual report on Form 10 ks filed with the Securities and Exchange Commission on March 19, 2024, and any subsequent filings with the Securities and Exchange Commission, all of which are available on gapinc.com. These forward looking statements are based on information as of today, November 21, 2024, and we assume no obligation to publicly update or revise our forward looking statements. Our latest earnings press release and the accompanying materials available on gapinc.com also include descriptions and reconciliations of any financial measures not consistent with generally accepted accounting principles. Joining me on the call today are Chief Executive Officer, Richard Dickson and Chief Financial Officer, Katrina O'Connell. With that, I'll turn it over to Richard.

[Richard Dickson, CEO, President & Director at The Gap Inc]

Good afternoon, and thank you for joining us. In the Q3, Gap Inc. Continued to perform while we transform, delivering another quarter that exceeded financial expectations. We grew net sales for the 4th consecutive quarter, expanded gross margin, delivered our highest Q3 operating margin in 7 years and gained market share for the 7th consecutive quarter. Our Q3 results reinforce that the execution of our strategic priorities, notably the rigor and discipline we've implemented around our brand reinvigoration playbook, has made us stronger.

[Richard Dickson, CEO, President & Director at The Gap Inc]

This gives me confidence that our transformation is taking hold and that we are on our way to become a high performing company and unlocking Gap Inc. Full potential. As usual, on today's call, I'll provide an update on our Q3 performance and progress in the context of our 4 strategic priorities, then Katrina will walk you through our detailed financial results and share our outlook before we open the call for questions. Let's start with financial and operational rigor. Gap Inc.

[Richard Dickson, CEO, President & Director at The Gap Inc]

Net sales were up 2% in the 3rd quarter and comps were up 1%. Old Navy posted a flat comp in the quarter with the 7th consecutive quarter of market share gains. GAAP comps were up 3%, the 4th consecutive quarter of positive comps and the brand delivered its 6th consecutive quarter of market share gains. Banana Republic comps were down 1% as we continue to see improvements around the fundamentals and I am pleased to report that Athleta's comps turned positive in the quarter, up 5% as the reinvigoration of this brand begins to take hold. We expanded gross margin by 140 basis points with SG and A in line with our expectations, delivering operating income of $355,000,000 and an operating margin of 9.3%, an increase of 2 70 basis points versus last year's reported operating margin.

[Richard Dickson, CEO, President & Director at The Gap Inc]

EPS was $0.72 up 24% versus Q3 of last year. We are maintaining inventory discipline with Q3 levels down 2% year over year, and we ended this quarter with a strong cash balance of approximately $2,200,000,000 and generated $540,000,000 in free cash flow year to date. Turning to our next strategic priority, we remain focused on driving relevance and revenue by executing on our brand reinvigoration playbook. Let's start with Old Navy. The brand performed well in the quarter with continued market share gains despite facing weather related headwinds.

[Richard Dickson, CEO, President & Director at The Gap Inc]

We had meaningful strength in our important men's and women's businesses, while our more weather sensitive kids and baby business slowed mid quarter due to unseasonably warm weather after a strong back to school performance. As soon as the weather cooled, we saw a pickup in sales, reinforcing our confidence in the brand for the holiday selling season. The brand is presenting its merchandising narratives and style better, and our customer is taking notice. Our in store and online communication continues to improve with more clarity around pricing and more compelling marketing promoting great value. We see an exciting opportunity in active as consumers continue to migrate to more active lifestyles.

[Richard Dickson, CEO, President & Director at The Gap Inc]

Active is the number one category in the U.

[Richard Dickson, CEO, President & Director at The Gap Inc]

S. Apparel industry with a

[Richard Dickson, CEO, President & Director at The Gap Inc]

total size of family as the mass value player in the category. We have already made progress through innovation, style and value, and it's been resonating with double digit growth in Q3 and consecutive growth over the last five quarters. We are intent on accelerating Old Navy's presence to win share in this important category, and I look forward to sharing more about our plans in this space soon. Turning to the Q4, Old Navy will have dialed up holiday activation with enhanced store visuals, holiday shops and an exciting campaign starring Jennifer Hudson set to her rendition of Winter Wonderland from her newly released holiday album. We'll also be taking a pronounced stance in Jingle Jammies, an Old Navy family favorite with expanded prints and patterns to celebrate the season.

[Richard Dickson, CEO, President & Director at The Gap Inc]

Now let's turn to Gap. Our focus on reigniting Gap's leadership in trend right products and creative expression through big ideas and culturally relevant messaging is resonating. Q3 marked the 4th consecutive quarter of positive comps and the 6th consecutive quarter of market share gains. Our campaigns and collaborations are attracting a new generation to Gap, while at the same time reinforcing the brand to those who have loved us for years. In Q3, we successfully executed the Get Loose campaign, which was rooted in denim and featured Troye Sivan, opening the door to a new generation.

[Richard Dickson, CEO, President & Director at The Gap Inc]

The campaign was amplified by storytelling around the loose trend and achieved a share increase in denim with positive customer feedback on both the product and communications. We were also pleased with the positive response to our MadHappy and Cult Gaia collaborations, which drove strong new customer acquisition and meaningful buying beyond the collabs. Gap is moving again. Between our relentless repetition of our campaign methodology, punctuated by our relevant collaborations, we've seen residents with a broader customer base and an increased engagement with the brand. Our recent Give Your Gift holiday campaign, which is one of our most innovative campaigns to date, has received a great response with a creative expression that is Signature Gap.

[Richard Dickson, CEO, President & Director at The Gap Inc]

The campaign showcases people with extraordinary talent, featuring Cash Soft, one of our best selling knit collections. Cash Soft is an innovative fabric that we have expanded into a wider assortment of styles and colors, including our iconic Gap Stripe. At this stage of the brand's reinvigoration, we are putting more energy behind the customer experience. More specifically, we are improving the digital dialogue and continuing to enhance and evaluate our store experience through service and aesthetics and are running several tests around the country, including at our Fifth Avenue Flatiron location in New York. Now moving on to Banana Republic.

[Richard Dickson, CEO, President & Director at The Gap Inc]

There's been a lot of progress at Banana Republic as we continue to focus on reestablishing the brand to thrive in the premium lifestyle space. In Q3, the men's business remained strong with momentum building quarter over quarter as men's pants, knits, sweaters and outerwear performed well. While we still have work to do in women's, we did see pockets of strength in the quarter, including cashmere. We are moving swiftly to both evolve the assortment architecture and improve fit. We see fit as one of our greatest opportunities and have been working deliberately to make improvements, which is already resulting in fewer returns at the brand.

[Richard Dickson, CEO, President & Director at The Gap Inc]

We are looking forward to holiday with improved in stock plans for key basics, a more balanced price architecture in women's, a more compelling dress assortment and a stronger cashmere point of view with more conviction in color and depth of product. We've continued to shift Banana's media mix towards more social and influencer marketing, which is putting the brand back into the cultural conversation with our compelling social narrative. We're also optimizing and repositioning the store footprint with a focus on locations that are relevant to our customers and well positioned to reflect the new aesthetic. During the quarter, we rolled out the new aesthetic in 2 key markets, Century City in Los Angeles and Tysons Corner in Northern Virginia. Both stores are already driving stronger performance and customer resonance.

[Richard Dickson, CEO, President & Director at The Gap Inc]

Shifting to Athleta. We've been eagerly anticipating the return to growth for Athleta. While the team has been working hard to improve the product, marketing and stores, this quarter we reached an inflection point with a positive plus 5% comp and we're feeling increasingly confident in the trajectory of the brand. We are building our customer file and have implemented a new marketing methodology and media mix model, which is driving compelling social narratives and attracting new higher value customers. We still have work to do to increase traffic, but we're pleased our brand communication is beginning to resonate with customers in a more meaningful way.

[Richard Dickson, CEO, President & Director at The Gap Inc]

The momentum Athleta has had growing new followers on TikTok is noteworthy with the brand becoming one of the platform's fastest growing sportswear retailers since its launch in February. Turning to Q4, we're excited about our holiday collection, which we believe is the best representation of the EVOLVE brand to date. Staying on trend and relevant, we're declaring this as the season of sets, introducing more color drops and increasing newness to drive frequency and interest. We are also focused on improving the customer experience both online and in store. So far, we've refreshed the product imagery in the website and remodeled 15% of the store fleet as we test an elevated experience for our customers.

[Richard Dickson, CEO, President & Director at The Gap Inc]

In summary, our brand reinvigoration playbook is comprehensive, and we've been deliberate about taking a phased approach in our execution. We've made great strides on product and marketing and are focused on continuous improvement as we expand our aperture to include enhancements to both the in store and online experiences for our customers. While each of our brands is in a different stage of the reinvigoration journey, I'm encouraged to see them gaining traction as we continue to execute our playbook and drive toward becoming a high performing house of iconic American brands that shape culture. Moving on to our 3rd strategic priority. We are deep in the work of strengthening our operating platform.

[Richard Dickson, CEO, President & Director at The Gap Inc]

During the quarter, the resilience of our supply chain was notable as we navigated the port strike, natural disasters and the various associated challenges. Our scale, agility and strong partnerships have allowed us to secure long term freight contracts and make advancements in the diversification of our sourcing footprint over the last few years. Of note, China now represents less than 10% of our sourcing. We're also continuing our efforts to energize our culture and drive high performance across our teams. With the introduction of our new vision, mission, purpose and values earlier this year, our global team is becoming more unified with a clear standard for how we work.

[Richard Dickson, CEO, President & Director at The Gap Inc]

This new sense of clarity is empowering our people, driving a step change in our ability to attract world class talent and partners and has driven our ability to consistently perform while we transform. I'm proud of how our teams came together to navigate and deliver the Q3. In the Q4, we remain focused on executing with excellence. Our Q3 quarter to date performance positions us well for the holiday selling season and gives us the confidence to raise our full year outlook for sales, gross margin and operating income growth. We look forward to finishing the year strong, creating a solid runway to unlocking Gap Inc.

[Richard Dickson, CEO, President & Director at The Gap Inc]

Full potential. And now I'll turn the call to Katrina for a closer look at our financials.

[Katrina O'Connell, Executive VP & CFO at The Gap Inc]

Thank you, Richard, and thanks, everyone, for joining us this afternoon. The Q3 is yet another quarter of meaningfully improved performance as we delivered sales growth, gross margin expansion, well controlled expenses, operating profit expansion and strong free cash flow year to date. It's exciting to see the brand reinvigoration take hold with our 4th consecutive quarter of net sales growth and wins across our brand portfolio as we continue to drive relevance and revenue. The financial and operational rigor we've developed is core to how we operate and is enabling us to perform as we transform, consistently delivering on our commitments and strengthening our financial performance. Some key highlights from the quarter include the following: Net sales were up 2% and comparable sales were up 1%, with solid results at Old Navy, continued strength at Gap, progress at Banana Republic and an inflection to growth at Athleta.

[Katrina O'Connell, Executive VP & CFO at The Gap Inc]

We delivered approximately 140 basis points of gross margin expansion and tightly managed SG and A dollars below last year, in line with our expectations. This resulted in an operating margin of 9.3% for Q3, marking the highest Q3 operating margin in the last 7 years and a 2 70 basis point improvement versus last year's reported operating margin. And we achieved 24% growth in earnings per share to $0.72 We ended the quarter with $2,200,000,000 of cash, cash equivalents and short term investments on the balance sheet and have generated $540,000,000 in free cash flow year to date. The continued strength in our performance gives us the confidence to raise our fiscal 2024 outlook for sales, gross margin and operating income growth. Turning to detailed results for the quarter.

[Katrina O'Connell, Executive VP & CFO at The Gap Inc]

Net sales of $3,800,000,000 increased 2% versus last year with comparable sales up 1%. Net sales in the quarter benefited from approximately 1 percentage point of growth due to the weekly shift related to the 53rd week dynamic. While we saw strength in back to school, hurricane related store closures and unseasonably warm weather beginning in mid September negatively impacted net sales growth for the quarter by an estimated 1 percentage point. By brand, starting with Old Navy. Net sales were $2,200,000,000 up 1% versus last year with comparable sales flat.

[Katrina O'Connell, Executive VP & CFO at The Gap Inc]

Meaningful strength in our important men's and women's businesses drove strong growth and continued market share gains, while our weather sensitive kids and baby businesses slowed mid quarter with warm weather delaying sales. As Richard mentioned, once the weather cooled, we saw a pickup in demand for fall products. Turning to Gap brand. Net sales of $899,000,000 were up 1% versus last year and comparable sales were up 3%. The continued momentum at Gap is exciting, with the brand achieving positive comp sales for the last 4 quarters, driven by strong product and marketing execution.

[Katrina O'Connell, Executive VP & CFO at The Gap Inc]

Banana Republic net sales of $469,000,000 were up 2% year over year with comparable sales down 1%. As Richard mentioned, we continue to improve the fundamentals of the brand and are encouraged by the strength in the Men's business as we make progress on our women's product, fit and assortment. Athleta net sales of $290,000,000 increased 4% versus last year, and comparable sales were up 5%. This quarter marked an important milestone for the brand as it returned to sales growth, with new product and marketing resonating with consumers. Now turning to gross margin in the quarter.

[Katrina O'Connell, Executive VP & CFO at The Gap Inc]

Gross margin of 42.7 percent expanded 140 basis points versus last year's gross margin, meaningfully above our expectations. Merchandise margin expanded 90 basis points, driven primarily by better inventory management. The remaining 50 basis points were driven by rod leverage. Now let me turn to SG and A. SG and A was $1,300,000,000 in the quarter, with nominal dollars below last year and in line with our prior outlook, as we demonstrate continued rigor in our expense management.

[Katrina O'Connell, Executive VP & CFO at The Gap Inc]

SG and A as a percentage of net sales was 33.4%, leveraging 130 basis points versus last year's reported rate and 110 basis points versus last year's adjusted rate, primarily due to lower advertising costs in the quarter. 3rd quarter operating margin of 9.3% improved 270 basis points compared to last year's reporting operating margin and 2.50 basis points versus last year's adjusted operating margin. Earnings per share in the quarter were $0.72 up 24% versus last year's reported earnings per share of $0.58 and up 22% versus last year's adjusted earnings per share of $0.59 Now turning to the balance sheet and cash flow. We maintained disciplined inventory management, ending with Q3 levels down 2% year over year. Based on the current macroeconomic environment, we expect to end the year with inventory levels similar to last year.

[Katrina O'Connell, Executive VP & CFO at The Gap Inc]

As I mentioned earlier, we ended the quarter with cash, cash equivalents and short term investments of $2,200,000,000 an increase of 64% from last year. Net cash from operating activities was $870,000,000 year to date, driven by higher operating profit. And our free cash flow of $540,000,000 year to date demonstrates the rigor we put into managing the business. During the quarter, we paid a dividend of $0.15 per share. Year to date, we will have returned $169,000,000 to shareholders in the form of dividends.

[Katrina O'Connell, Executive VP & CFO at The Gap Inc]

On November 12, our Board approved maintaining that $0.15 dividend for the Q4 of fiscal 2024. Now turning to our outlook for the remainder of fiscal 2024. Starting with revenue, we are raising our outlook and now expect full year net sales growth to increase between 1.5% 2% year over year excluding the 53rd week. As a reminder, the loss of the 53rd week results in a detrimental impact of approximately $160,000,000 to fiscal 2024 net sales. Our full year outlook implies that Q4 net sales will increase between 1% to 2% versus last year, excluding the expected 7 percentage point or approximately $300,000,000 negative impact to the quarter due to both the weekly calendar shift as well as a loss of the 53rd week.

[Katrina O'Connell, Executive VP & CFO at The Gap Inc]

Moving to gross margin. We are raising our full year outlook for gross margin and expect expansion of approximately 220 basis points compared to fiscal 2023's gross margin of 38.8 percent. This includes approximately 100 basis points of benefit from the commodity cost tailwinds we realized in the first half of the year, with the balance primarily driven by better inventory management. We continue to expect rod as a percentage of sales to be relatively neutral on a year over year basis. Our full year outlook implies a Q4 gross margin similar to last year, excluding approximately 1 percentage point of rod deleverage from lower sales in the quarter due to the loss of the 53rd week.

[Katrina O'Connell, Executive VP & CFO at The Gap Inc]

Regarding SG and A, we continue to expect full year SG and A of approximately $5,100,000,000 This outlook reflects lower spend and increased leverage year over year as a result of the substantial savings actions we've taken over the last 2 years and the expense focus and rigor we continue to demonstrate. We are committed to continuing this discipline as we look to unlock more efficiencies in the business. We are raising our full year 2024 operating income outlook with growth expected to be in the mid to high 60% range compared to last year's adjusted operating income of $606,000,000 This represents significant progress toward returning to historical operating profit levels over time. As I reflect on our Q3 results, the reinvigoration of our brands is energizing, driving sales growth and consecutive market share gains, which when combined with our rigor, is delivering meaningfully improved financial performance. I want to thank our teams for the impressive cross functional partnership and collaboration that fueled these strong results.

[Katrina O'Connell, Executive VP & CFO at The Gap Inc]

We have established a solid foundation to build on as we drive towards becoming a high performing company that generates sustainable profitable growth and delivers long term value for our shareholders. With that, we'll open the line for questions. Operator?

[Operator]

Thank you. Our first question comes from the line of Dana Telsey with Telsey Advisory Group. Please go ahead.

[Dana Telsey, CEO and Chief Research Officer at Telsey Advisory Group]

Hi, good afternoon and nice to see the progress. As you think about the weather impact that you had, it certainly sounds like the business would have beaten expectations in the Q3. With each of the divisions, are there activations in product? Is it the consumer that's driving the sell through as you see it, Richard? And then the promotional tone outlook as you prepare for the holiday season, how you're planning it this year compared to last year?

[Dana Telsey, CEO and Chief Research Officer at Telsey Advisory Group]

Thank you.

[Richard Dickson, CEO, President & Director at The Gap Inc]

Okay. Well, thank you, Dana. I appreciate the question. And first, let me just start by saying that I'm really proud of the results. I mean, we delivered a really another successful quarter.

[Richard Dickson, CEO, President & Director at The Gap Inc]

We grew our net sales for the 4th consecutive quarter. We gained market share across all brands. That's actually the 7th consecutive quarter that we're posting market share gains for the company and against the backdrop of a challenged industry. You know, the apparel industry was down a point and a half. So we really feel very good about the strength of our brands overall, particularly this quarter.

[Richard Dickson, CEO, President & Director at The Gap Inc]

We meaningfully also expanded operating margin, as mentioned, 270 basis points to 9.3%. It's the highest q3 operating margin in 7 years. We're running a more disciplined business, higher margins, controlling the controllables, tighter expenses and better inventory management. Dana, when we look at weather, you know, weather becomes a really interesting, obviously parallel to many retailers. Our teams did a really nice job navigating multiple disruptions and delivered strong performance in the quarter.

[Richard Dickson, CEO, President & Director at The Gap Inc]

Obviously, we had significant challenges. There were 2 hurricanes, multiple tropical storms. These resulted in some store closures across our brands. In fact, at peak of the storms, we had almost a 180 closures, half of which were Old Navy stores. Most importantly, we were pleased that all of our employees, by the way, infected in areas remain safe.

[Richard Dickson, CEO, President & Director at The Gap Inc]

And obviously, we've reopened those stores that were affected. As we saw the weather turn, we saw big pickups and rebound in our business. And in the context of our merchandise and merchandising and reaction from consumers as the weather picked up, so did our business. And we're feeling as we look ahead, it's a strong start to the season. From a promotional perspective, there's nothing consequentially different.

[Richard Dickson, CEO, President & Director at The Gap Inc]

As you know, you know, we we basically drive our promotional levels based on competitive environments that we operate in. We're remaining focused on executing our playbook to drive interest and demand. We will, of course, compete with promotions in the quarter as we do so all the time, but we do it strategically. We're able to compete well, compete well while we drive sales. Market share gains continue, and we'll, of course, continue to work on expanding our gross margins.

[Operator]

Our next question comes from the line of Adrienne Yih with Barclays. Please go ahead.

[Adrienne Yih, Managing Director, Consumer Discretionary Analyst at Barclays]

Thank you very much and congratulations on yet another quarter kind of strung together, of this outside upside. Richard, I guess my question for you, and it's kind of one and the same for Katrina as well, is the OpEx number, so kind of just staying at the $5,100,000,000 I think last quarter you had talked to us about some media and marketing shifts, and kind of looking at the efficacy of kind of like return on advertising, etcetera. Can you update us on that? And maybe, Katrina, an early look, if you can, just at is what $5,100,000,000 the right OpEx number? I know you've talked about additional cost cutting opportunities.

[Adrienne Yih, Managing Director, Consumer Discretionary Analyst at Barclays]

So just wondering structurally how we should think about that dollar number. Thank you very much.

[Katrina O'Connell, Executive VP & CFO at The Gap Inc]

Hi, Adrienne. I'll go ahead and maybe address the broader SG and A question and then Richard can double click a little bit on the marketing piece. So we've rigorously managed the cost structure over the last few years, and that includes this year. Over the last 2 years, we've worked to increase the rigor in the business, and have actioned roughly $550,000,000 in cost actions. You're right, the $5,100,000,000 is still the number we've guided to for this year.

[Katrina O'Connell, Executive VP & CFO at The Gap Inc]

That does reflect lower nominal dollars versus last year, and it's leveraging. Interestingly, we are finding efficiencies throughout this year and that's offsetting costs that are associated with higher sales than we started out with at the beginning of the year, as well as higher incentive comp accruals that we expect this year. So we are managing that line. It seems like the 5.1 hasn't moved, but there's a lot of work happening to find efficiencies in the business. As it relates to the future, we're being very thoughtful about this next leg of cost savings as we balance efficiencies, which we know exist in the business, with some strategic investments we might use to fuel the reinvigorations of our brand.

[Katrina O'Connell, Executive VP & CFO at The Gap Inc]

So we're committed to the discipline. And with that, maybe, Richard, you can comment a little more on the marketing piece.

[Richard Dickson, CEO, President & Director at The Gap Inc]

Yeah. Thanks, Adrian. You know, as as Katrina mentioned, we do concentrate heavily on effectiveness and efficiencies. Speaking very specifically about marketing, we all know marketing is a much more complex function than it has been in the past. We're certainly living in a daily digital dialogue with consumers, and consumers are moving at an incredibly faster pace than ever.

[Richard Dickson, CEO, President & Director at The Gap Inc]

We talked about in our Q1 earnings call, we announced our new partnership with Omnicom, which is really centered on leveraging our media dollars to become a much more effective, in our demand creation model. Our brands really need to meet consumers where they are. We've been working hard at improving our creative expression, which needs to be met with our media platforms that we that we manage those creatives on. And much of that motivation was designed in selecting our new media partner. I would also say that this all complements, you know, the up leveling of our creative expression of our brands in support of our playbook, you know, driving cultural relevant messaging, stimulating conversations about our brands.

[Richard Dickson, CEO, President & Director at The Gap Inc]

I'm very pleased with the progress we're making across the portfolio in our effectiveness of marketing and ultimately our new approach in media. As we continue to learn, expand and grow, we do believe that this best in class partnership that we've established with Omnicom will continue to elevate our media capabilities and result in a much more effective spend over time.

[Adrienne Yih, Managing Director, Consumer Discretionary Analyst at Barclays]

Thank you very much. Happy holidays and best of luck.

[Richard Dickson, CEO, President & Director at The Gap Inc]

Thank you.

[Operator]

Our next question comes from the line of Robert Drbul with Guggenheim. Please go ahead.

[Robert Drbul, Senior Managing Director, Equity Research at Guggenheim Securities, LLC]

Hi, good afternoon. Two questions for you, if I could. The first one is on Athleta, just how are you feeling about the product and sort of the progress that you're making on the product? And then the second one is, can you just talk a bit more, Zach posing the impact that he's having and are you able to see it yet or can we see it yet from the results or in the product? Thanks.

[Richard Dickson, CEO, President & Director at The Gap Inc]

Yeah. Robert, thanks for the question. You know, we're we're excited to talk about Athleta. You know, Q3 marked an exciting milestone for the brand. You know, the brand returned to growth with net sales up 4%, comps were up 5%.

[Richard Dickson, CEO, President & Director at The Gap Inc]

And this is really built around the efforts the team has been working around, product, marketing, in store experience. You know, all of this really came together in the quarter, and it showed up in the results. It's also important to note that we had share gains as well in a category that has been really important for us collectively to grow. We saw great success with our new product, particularly in core bottoms and our limited edition drops. We've also seen continued strength in other key categories in the brand.

[Richard Dickson, CEO, President & Director at The Gap Inc]

Our marketing is resonating. We've begun to really broaden our customer base as our marketing and media continued to gain traction. We had meaningful acceleration in our new follower growth on TikTok. And we've been seeing great amplification of the power of she through our culturally relevant activations that are happening all over the country. So in q4, we really believe we have a much stronger product and visual presentation.

[Richard Dickson, CEO, President & Director at The Gap Inc]

We're expanding the distribution of the limited edition drops I mentioned that are working really well. And we're, of course, advancing and implementing innovative media strategies that are really driving at the speed of culture. I'm really very, very confident in the progress that we're seeing in Athleta. It's encouraging. The team has energy and momentum, and we're feeling increasingly confident in the trajectory of the brand.

[Richard Dickson, CEO, President & Director at The Gap Inc]

On the second part of your question, Zach. Look, Zach has provided incredible energy. Overall, Zach's effort to truly put Gap Inc. Brands in the cultural conversation has been pretty pronounced. He's working on a variety of different product execution, specifically also working on fit across the company.

[Richard Dickson, CEO, President & Director at The Gap Inc]

We have Zach focused as well on some of our store refreshes. There are many happening on Gap, Athleta, Banana, and Old Navy. And he continues to attract a great, I'd say, you know, talent pull from the marketplace, and also represent a great cultural curation for the company overall. We couldn't be more pleased with the energy that he's provided, and there's a lot more to share as 2025 rolls out.

[Operator]

Our next question comes from the line of Matthew Boss with JPMorgan. Please go ahead.

[Matthew Boss, Equity Research Analyst at JPMorgan Chase]

Thanks and congrats on a really nice quarter.

[Matthew Boss, Equity Research Analyst at JPMorgan Chase]

Thank you.

[Matthew Boss, Equity Research Analyst at JPMorgan Chase]

So Richard, so with the reinvigoration work driving low single digit positive comps year to date, do you see this as a sustainable target multiyear as we think about maybe top line for the business? And then Katrina, you cited 50 basis points of broad leverage on a 1 comp this quarter. What's the right leverage hurdle you see going forward for the business?

[Richard Dickson, CEO, President & Director at The Gap Inc]

Thanks, Matt. I really appreciate the question because it's to the extent that it sort of makes me reflect on where we've been and where we are today. And we've made considerable progress executing around our strategic priorities. You know, we're delivering consistently, and that's a really important part of what we've been working on at Gap Inc. This is the 4th quarter of consecutive sales growth.

[Richard Dickson, CEO, President & Director at The Gap Inc]

It's the 7th consecutive quarter of share gains. We're expanding margins. We're finding efficiencies in our cost structure. We're returning to more historical levels of profit, and we're also strengthening the balance sheet. The reinvigoration playbook is fundamentally working, and our brands are stronger today.

[Richard Dickson, CEO, President & Director at The Gap Inc]

We're gaining strength. That's demonstrated not only by sales, but by market share gains across all of our brands this quarter. And again, that's against a backdrop of a challenged industry, down 1.5%. So what I would say is that we're doing what we said we were going to do. We're transitioning from fixing fundamentals to now continuous improvement.

[Richard Dickson, CEO, President & Director at The Gap Inc]

We're building a stronger foundation really to unlock the full potential of Gap Inc. Portfolio. And it gives me great confidence to be able to not only commit to increased guidance in the context of sales, margin and operating income, but ultimately, it gives us the confidence in our ability to generate sustainable, profitable growth. So at this juncture, we're focused on executing with excellence in the Q4 as we look to finish the year strong and, of course, providing updates for you towards the end of the year as well as for full year 2025.

[Katrina O'Connell, Executive VP & CFO at The Gap Inc]

And, Matt, as it relates to the leverage point on Rod, on a full year basis, Rod leverages on sort of modestly positive sales growth.

[Matthew Boss, Equity Research Analyst at JPMorgan Chase]

Great. Best of luck.

[Richard Dickson, CEO, President & Director at The Gap Inc]

Thank you, Matt.

[Operator]

Our next question comes from the line of Brooke Roach with Goldman Sachs. Please go ahead.

[Brooke Roach, Vice President, Equity Research at Goldman Sachs]

Good afternoon and thank you for taking our question. You mentioned that you're fueling some strategic investments to drive reinvigoration of the brands and that's something that you're considering in SG and A going forward. Richard, you also spoke to putting more energy behind the customer experience at the Gap brand. Can you contextualize some of these strategic investments to a broader degree and how you're thinking about the rate and pace of some of these tests as well as broader rollout to drive sustainably positive comp and market share growth? Thank you.

[Richard Dickson, CEO, President & Director at The Gap Inc]

Thanks, Brooke. Look, each brand is in a different point in the process of the reinvigoration journey. And again, I'm really encouraged to see each one of our brands gaining traction as we continue to execute our playbook and really drive to becoming a high performing house of iconic brands. And a lot of that is reflected in the consistency of how we're delivering our reinvigoration playbook. Net sales up, you know, for the 4th consecutive quarter is a great reflection of that consistency.

[Richard Dickson, CEO, President & Director at The Gap Inc]

Our 2 biggest brands, Old Navy and Gap, are probably furthest along with multiple quarters of market share gains, both relevance and revenue. Banana Republic, there's been a lot of progress at Banana, and we're continuing to focus on reestablishing the brand to thrive in the premium lifestyle space. And Athleta at an inflection point. You know, the improvements we've made in product, marketing, stores are really beginning to show up in the results. As I mentioned, no plus 5% comp in the quarter is a significant turn, and we're happy with that as well as the market share gains that that brand has gained in the quarter.

[Richard Dickson, CEO, President & Director at The Gap Inc]

So our brand reinvigoration playbook is comprehensive, and we've been deliberate about taking a phased approach in our execution. We've made a lot of progress on product. We've made a lot of progress on marketing. We're focused on continuous improvement in those areas, and we're going to expand our thoughts around enhancements in both the in store and online experiences for our customers. This is ongoing work, but at this juncture, as we reflect on where we are compared to where we were and the energy in our go forward, we're feeling very, very confident.

[Operator]

Our next question comes from the line of Ike Boruchow with Wells Fargo. Please go ahead.

[Ike Boruchow, Managing Director: Senior Analyst - Retailing, Specialty Softlines and E-commerce at Wells Fargo]

Hey, good afternoon. Congrats, guys. Richard, I think 2 for you or maybe the second is for Katrina. But just I think when people look at the margin structure of the business, it seems like there's more room to go on the operating margin, but the gross margins just historically look very high, which is a good problem to have. But I guess, how would you talk about your ongoing ability to drive margin in this business?

[Ike Boruchow, Managing Director: Senior Analyst - Retailing, Specialty Softlines and E-commerce at Wells Fargo]

It feels like you've only been in the seat a year. It feels like there's a lot more opportunity, but would love to kind of get your thoughts on how to think about that. And then maybe, Katrina, the net cash position is as large as it's been in a long time. Is there a moment where you guys would consider kind of going back to share repurchases to add a layer of growth to the bottom line that maybe you're not seeing today?

[Richard Dickson, CEO, President & Director at The Gap Inc]

So first off, thanks, Ike, for the question. You know, we've been concentrating heavily, obviously, on our 4 strategic priorities. And the first, which has been, you know, financial and operational rigor, has really included a lot of disciplines that's been put into the business, primarily to drive more credibility and consistency in our financial outcome. We were really pleased with the 140 basis points of year over year gross margin expansion in the Q3, and I think it's a reflection of the rigor that we've developed. It is becoming core to how we operate, and it's showing up in stronger financial foundation as we really better our assortments, continue to run tighter inventory management.

[Richard Dickson, CEO, President & Director at The Gap Inc]

I mean, we mentioned obviously up to net sales, but that's on down to inventory. We've got lower promotional activity. This combined with commodity costs that we've recaptured in the first half has really continued to help us deliver better gross margins overall. And I think I'll just turn it probably over to Katrina to expand on the next part of the question.

[Katrina O'Connell, Executive VP & CFO at The Gap Inc]

Yeah. Ike, I really appreciate you asking that question. I think we're very proud of the strength of the balance sheet. As you called out, we're sitting on about 64% more cash than we were a year ago. We are always evaluating the best return of capital to shareholders, to make sure that we're maximizing value.

[Katrina O'Connell, Executive VP & CFO at The Gap Inc]

I think we've articulated this before, but we have a pretty balanced framework as we think about capital allocation for the company. The first is that we like to invest in the business to the degree we can get a good return. 2nd, we believe in paying an attractive dividend as a really key component of shareholder returns. And third, we do believe in repurchasing shares to offset dilution over time, and we are consistently evaluating that. I think, of note, we do have about $476,000,000 remaining under a prior share repurchase authorization.

[Katrina O'Connell, Executive VP & CFO at The Gap Inc]

So we do sort of continue to reevaluate that over time.

[Operator]

Our next question comes from the line of Alex Stratton with Morgan Stanley. Please go ahead.

[Alex Straton, Analyst at Morgan Stanley]

Great. Thanks so much for taking the question. Maybe for Richard or Katrina, just on Old Navy, it sounds like you've seen some improvement following the weather headwinds. So are you targeting acceleration in that business in the 4th quarter? And maybe taking a bigger step back, like what are your priorities for Old Navy in the 25?

[Alex Straton, Analyst at Morgan Stanley]

Thanks a lot.

[Richard Dickson, CEO, President & Director at The Gap Inc]

Thanks, Alex. Look, Old Navy really showed some real strength in the quarter. Net sales up 1%, Comps were flat. This is our 7th consecutive quarter of market share gains for the brand. Again, this is against a backdrop of a challenging industry.

[Richard Dickson, CEO, President & Director at The Gap Inc]

I've been really excited to see the strength in men's and women's, which outperformed the comp of the overall brand. We saw double digit growth, as I mentioned in my opening remarks, in active as a category. Denim also performed really well. The challenge for Old Navy was the kids' business. In particular, it was impacted by the wear now nature of the category.

[Richard Dickson, CEO, President & Director at The Gap Inc]

We had unseasonably warm weather, which slowed sales as the quarter progressed, even though we started very strong with a back to school season. But not only is the kids and baby category more weather sensitive, but value consumers also tend to buy closer to need. So it is also important that we mentioned at the gap level, we quantified the weather impact to sales at about one point. And as soon as the weather cooled, we saw a rebound in sales and feel confident in the go forward. You know, as we look to our priorities in Old Navy now and as we head into 2025, you know, we're concentrating on continuing to be an authority in the style and value space.

[Richard Dickson, CEO, President & Director at The Gap Inc]

The marketing that we've been doing is resonating with more clarity and pricing, in store navigation and compelling storytelling. As we look ahead, you know, in the Q4, we're very excited about the brand's dialed up holiday activations, and we're focused obviously on executing with excellence to deliver the year. And we will continue in 2025 to build on the success of the brand. You know, the brand itself is is a huge business. It's the number 2 apparel brand in the US.

[Richard Dickson, CEO, President & Director at The Gap Inc]

We lead in many categories in the apparel market. And we also see a really exciting opportunity, as I mentioned, in the active space. We're watching consumers migrate more and more into active lifestyle. When we study the active space, it's the number one category in the US as an apparel industry. The total size, dollars 70,000,000,000 Old Navy, already a top 5 player.

[Richard Dickson, CEO, President & Director at The Gap Inc]

Over the last year and continuing into 2025, we've been and will be strategically pursuing the space by further expanding our assortment, driving more innovation, upping our ante end style, and it's working. You know, this is resonating with our consumer. We were up double digits in the 3rd quarter. It's also the 5th consecutive quarter of growth in that category for us within Old Navy. We're consistently driving share.

[Richard Dickson, CEO, President & Director at The Gap Inc]

It's also important to note we're now the 3rd largest women's active brand in the US. This is up 3 points or 3 slots from last year's number 6 ranking. So significant progress. I think as you look forward to 2025, while there's going to be a lot of good and exciting progress that we're going to make on Old Navy, We believe that we can become the destination for the family in this category with our design expertise, fabric innovation, capabilities, and brand authority. And I'm really looking forward to sharing more as things progress.

[Operator]

Our next question comes from the line of Lorraine Hutchinson with Bank of America. Please go ahead.

[Lorraine Hutchinson, Managing Director at Bank of America]

Thank you. Good afternoon. Katrina, where are Old Navy's margins versus prior periods of positive comps? And what do you see as the biggest drivers to improve profitability at the brand?

[Katrina O'Connell, Executive VP & CFO at The Gap Inc]

Well, I think you know we don't disclose margins by brand, but overall, we're really proud of the margin progress as a company. We picked up the 140 basis points of margin in the quarter and we just guided to margins that will expand about 220 basis points versus prior year. I think it's important to note that that reflects average unit retails that are above 2019, almost universally across our brands. And so, we're really proud of the progress that we've made there. As we think about improving profitability going forward, we'll talk more about that.

[Katrina O'Connell, Executive VP & CFO at The Gap Inc]

I think at the end of the day, we're really excited that the brand reinvigoration work that is happening is showing up in sales growth and market share gains. I think that's a really important part of overall profitability.

[Operator]

Our next question comes from the line of Simeon Siegel with BMO Capital Markets. Please go ahead.

[Simeon Siegel, Managing Director & Senior Analyst at BMO Capital Markets]

Thanks. Hey, everyone. Nice to

[Simeon Siegel, Managing Director & Senior Analyst at BMO Capital Markets]

see the ongoing progress. Richard, can you talk to me about your customers a little bit? As you think about the market share gains, anything new you're seeing? So are you bringing in new customers? Are you seeing more frequency with the existing?

[Simeon Siegel, Managing Director & Senior Analyst at BMO Capital Markets]

So anything you could speak to around that? And then maybe a dumb question, I apologize, but can you elaborate on the improved merchandise margin because of inventory management comment? Is that just better full price, less markdowns, something else? And maybe any color how that plays across the different brands? Thanks, guys.

[Richard Dickson, CEO, President & Director at The Gap Inc]

Yes. Thanks, Simeon, for the question. We we see and saw consistent results across our customer income cohorts in, in the Q3. Our our lowest income customers remain somewhat flat. And given that they're impacted by the warmer weather with less reason to update wardrobes based on seasonal changes.

[Richard Dickson, CEO, President & Director at The Gap Inc]

And on the flip side, we continue to see share gains from our middle and higher income cohorts. Those customers are responding to value, relevance of our assortments, certainly our style authority across our portfolio. But we do see strong responses to our value proposition from higher end consumers. When they're offered the right price and right style and right value equation, customers with income over 100 ks did grow in the quarter. And we believe that we're well positioned with our portfolio brands, particularly with Old Navy as the largest brand in the value space, but with a very strong perception of style, quality and authority.

[Richard Dickson, CEO, President & Director at The Gap Inc]

I'll probably turn the next part over to to Katrina to elaborate on merchandising margin.

[Katrina O'Connell, Executive VP & CFO at The Gap Inc]

Sure. So, with our disciplined inventory management, as well as the progress we're making on the assortments that we're offering to our consumers, as well as the relevant marketing that's driving consumers to purchase, you know, our brands, we are seeing the merchandise margins improve based on that overall discipline. It's showing up, honestly, Simeon, in almost all the levers, whether it's fewer markdowns, whether it's fewer overall promotions, or whether it's, just basically tighter inventory allowing for better sell throughs overall. So, it's showing up in all the different levers.

[Operator]

Our next question comes from the line of Mark Altschwager with Baird. Please go ahead.

[Mark Altschwager, Senior Research Analyst at Robert W. Baird & Co]

Great. Thanks for taking my question. First, Richard, where is each brand's real estate footprint today versus the longer term opportunity? And any plans to accelerate store refreshes moving forward as you reinvigorate the customer experience? And then Katrina, just on gross margin, quick follow-up there.

[Mark Altschwager, Senior Research Analyst at Robert W. Baird & Co]

I guess, one, I mean, did you see ongoing AUC tailwinds in the quarter? Or was that fully played out in the first half of the year? And then just overall in gross margin, it's been a nice consistent source of upside this year suggesting some pretty conservative planning there. How are you thinking about the range of outcomes over holiday on the promotional front? And was there any did you approach the guide any differently in Q4 versus what you've done year to date just given the compressed shopping window and perhaps greater uncertainties there?

[Mark Altschwager, Senior Research Analyst at Robert W. Baird & Co]

Thank you.

[Richard Dickson, CEO, President & Director at The Gap Inc]

Okay, Mark. We will do our best to unpack that, but appreciate the comprehensive questions. First, on the each brand's real estate footprint and how we're thinking about real estate and certainly our store refreshes moving forward. It is part of our brand reinvigoration effort. You know, we are always evaluating and optimizing our retail footprint.

[Richard Dickson, CEO, President & Director at The Gap Inc]

We're currently, you know, working through various different store closures as well as store openings, refreshes, remodels across our fleet. We've just yesterday, in fact, opened up a new refresh in New York City Flatiron District with our Gap store. We have tests as well for Athleta that are rolling out to over 40 doors. Old Navy has new expressions from a merchandising perspective that we are rolling out and testing. And, of course, Banana Republic has opened several new aesthetic flagship stores, one in particular in SoHo, that really features and puts forth the new aesthetic.

[Richard Dickson, CEO, President & Director at The Gap Inc]

So, you know, we approach our strategy through an omnichannel lens, both ecommerce and bricks and mortar. We do believe in the store experience, and we're working hard and fast and furiously to refresh some of these locations in a more pronounced way, learning as we go, testing and measuring the success, both things that are working and not working, so that we could accelerate the progress and create really exciting consumer experiences that excite and delight our our customers moving forward.

[Katrina O'Connell, Executive VP & CFO at The Gap Inc]

On On do you want

[Katrina O'Connell, Executive VP & CFO at The Gap Inc]

me to Yeah. Yeah.

[Katrina O'Connell, Executive VP & CFO at The Gap Inc]

So on gross margin, Mark, I think the first question around AUC tailwind in the quarter. So overall, we expect about 100 basis points of benefits from commodities on the full year. That's about 200 basis points of commodity benefit that came in the front half, but the back half is largely neutral, as we start to lap the commodity benefits from last year. So, really not much happening in AUC tailwinds in either q3 or q4. As it relates to the compressed holiday shopping window, right now, we are focused on winning early.

[Katrina O'Connell, Executive VP & CFO at The Gap Inc]

I think you can see that we're out there with our holiday assortments. We are working hard to compete to win with newness in product, compelling marketing, and yes, some strategic promotions. You know, Richard, I think mentioned this, we have a much more pronounced holiday expression in our stores, driving relevant interest and early customer engagements. And we're really focused on executing that with excellence. We are actually operationally prepared across our supply chain logistics and stores for the higher volume days we're expecting as a result of the compressed shopping season.

[Katrina O'Connell, Executive VP & CFO at The Gap Inc]

And as far as margin, we're going to compete on margin and promotions as needed depending on the customer environment, and that's all embedded in the guide that we gave today.

[Mark Altschwager, Senior Research Analyst at Robert W. Baird & Co]

Thank you. I think you hit all of my questions. So appreciate that and welcome to

[Mark Altschwager, Senior Research Analyst at Robert W. Baird & Co]

the holiday.

[Richard Dickson, CEO, President & Director at The Gap Inc]

All right, Mark.

[Richard Dickson, CEO, President & Director at The Gap Inc]

Thank you, Mark.

[Operator]

Our next question comes from the line of Michael Binetti with Evercore ISI. Please go ahead.

[Michael Binetti, Senior Managing Director at Evercore ISI]

Hey, guys. Thanks for taking our question. Congrats on a nice quarter. Back to one of the earlier questions, the 50 basis points of leverage on a one point of rod, Katrina, is that maybe could you speak to how durable that kind of leverage is beyond 2024? And then, I guess, Richard, given some of the competitive landscape in kids and babies, there's some capacity coming out of the industry and some signs of competitors lowering prices or tightening up value.

[Michael Binetti, Senior Managing Director at Evercore ISI]

Have you seen any impact your business or had to make any adjustments to the way you're thinking about strategy in kids and babies beyond the weather sensitivity that you spoke to in the quarter?

[Katrina O'Connell, Executive VP & CFO at The Gap Inc]

Michael, so on 2025, we'll talk more about that we move forward. I think right now what you're experiencing is, the higher sales that we get from our online business on relatively steady rod as we've closed stores over a time period is giving us that leverage. So we'll talk more about 2025 as we move forward.

[Richard Dickson, CEO, President & Director at The Gap Inc]

Yeah. And Michael, on the kids and baby category, you know, it had a challenging performance overall. It underperformed the apparel category. The market was down 3%

[Richard Dickson, CEO, President & Director at The Gap Inc]

in the

[Richard Dickson, CEO, President & Director at The Gap Inc]

quarter. Gap Inc. Is a dominant player in this category. I mean, we we certainly have strong presence, and we believe in the category. We own over 8% of total share.

[Richard Dickson, CEO, President & Director at The Gap Inc]

As I mentioned, we had a strong kickoff in the Q3 with a strong back to school season. We had some terrific product and advertising, which, by the way, I hope you saw. And in the beginning of mid September, we did have unseasonably warm weather, which presented a headwind, and it disproportionately impacted the kids in baby business. It is a where now category, you know, mom shopping this category shops when it's closer to need. Kids grow fast.

[Richard Dickson, CEO, President & Director at The Gap Inc]

You know, you're not buying a puffer in weather that, you know, you don't need it. And then you're sort of waiting because 6 months later, your kid could have a different size. So the weather really does impact the kids and baby business more significantly than it does other. That being said, you know, we're we're a leading player in market share in the category. We believe in the category.

[Richard Dickson, CEO, President & Director at The Gap Inc]

As soon as the weather turned, we saw a rebound and feel very confident in our assortment and composition going forward. And we'll continue to be a leader in this category, and we'll have lots to share in 2025.

[Michael Binetti, Senior Managing Director at Evercore ISI]

Thank you very much.

[Richard Dickson, CEO, President & Director at The Gap Inc]

Thank you.

[Operator]

Thank you. We've reached the end of our question and answer session. That does conclude our conference call. You may now disconnect.

Participants

Executives

• Katrina O'Connell, Executive VP & CFO

Analysts

• Whitney Notaro, Head Of Investor Relations at The Gap Inc
• Richard Dickson, CEO, President & Director at The Gap Inc
• Dana Telsey, CEO and Chief Research Officer at Telsey Advisory Group
• Adrienne Yih, Managing Director, Consumer Discretionary Analyst at Barclays
• Robert Drbul, Senior Managing Director, Equity Research at Guggenheim Securities, LLC
• Matthew Boss, Equity Research Analyst at JPMorgan Chase
• Brooke Roach, Vice President, Equity Research at Goldman Sachs
• Ike Boruchow, Managing Director: Senior Analyst - Retailing, Specialty Softlines and E-commerce at Wells Fargo
• Alex Straton, Analyst at Morgan Stanley
• Lorraine Hutchinson, Managing Director at Bank of America
• Simeon Siegel, Managing Director & Senior Analyst at BMO Capital Markets
• Mark Altschwager, Senior Research Analyst at Robert W. Baird & Co
• Michael Binetti, Senior Managing Director at Evercore ISI