15 slides from Gap, Inc. (the)'s earnings presentation, Mar 4, 2021
Slide 1: Gap Inc. Fourth Quarter & Fiscal Year 2020 Earnings Results
Gap Inc. Fiscal 2020 Sonia Syngal CHIEF EXECUTIVE OFFICER Katrina O’Connell CHIEF FINANCIAL OFFICER FOURTH QUARTER & FISCAL YEAR EARNINGS RESULTS
Slide 2: Forward Looking Statements / Non-GAAP Financial Measures
Forward Looking Statements / Non-GAAP Financial Measures Forward Looking Statements This conference call and webcast contain forward-looking statements within the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. All statements other than those that are purely histori
Slide 3: Statement from the CEO
Statement from the CEO In an unprecedented year, I couldn’t be prouder of what our employees have accomplished together. Our powerful brands moved to offense with purpose-led marketing and strength in relevant categories, like Active and Fleece, allowing us to gain meaningful market share quarter-ov
Slide 4: Power Plan 2023
Power Plan 2023 Power of our Brands Grow four purpose-led, billion-dollar lifestyle brands Power of our Portfolio Extend our customer reach across every age, body and occasion through our collective power Power of our Platform Leverage our omni capabilities and scaled operations and extend our engin
Slide 5: Q4 2020 Financial Highlights
Q4 2020 Financial Highlights • Comparable sales flat • 49% increase in online net sales year-over-year • Third consecutive quarter of improved net sales • Ended the year with $2.4 billion in cash, cash equivalents and short- term investments 5
Slide 6: Q4 2020 P&L Summary
Q4 2020 P&L Summary Q4 2020 Q4 Q4 vs. ($ Millions) 2020 2019 Q4 2019 Net Sales $4,424 $4,674 (5%) Gross Profit $1,668 $1,674 +0% % of Sales 37.7% 35.8% +190 bps Merchandise Margin B/(W) LY (210 bps) +20 bps ROD % of Sales B/(W) LY +400 bps +0 bps Operating Expenses $1,534 $1,919 (20%) % of Sales 34.
Slide 7: Adjusted Operating Expense / Income
Q4 2020 Adjusted Operating Expense / Income Reflects non-cash impairment charges related to Intermix ($ Millions) Operating Expenses 13 Weeks Ended January 30, 2021 Operating Expenses as a % of Net Sales Operating expenses, as reported $ 1,534 34.7% Less: Non-cash impairment charges related to Inter
Slide 8: FY 2020 Financial Highlights
FY 2020 Financial Highlights • Unveiled the company’s Power Plan 2023 strategy • Delivered over $6 billion in sales online; 45% of total net sales • Higher-margin Old Navy and Athleta were 63% of company sales • Surpassed $1 billion in sales at Athleta with 16% annual sales growth 8
Slide 9: FY 2020 P&L Summary
FY 2020 P&L Summary Fiscal year 2020 results significantly impacted by COVID- related store closures FY 2020 FY FY vs. ($ Millions) 2020 2019 FY 2019 Net Sales $13,800 $16,383 (16%) Gross Profit $4,705 $6,133 (23%) % of Sales 34.1% 37.4% (330 bps) Merchandise Margin B/(W) LY (410bps) (60bps) ROD % o
Slide 10: Comparable Sales Growth
Q4 2020 Comparable Sales Growth +0% +7% (6%) (22%) +26% 10
Slide 11: Revenue Breakdown
Q4 2020 Revenue Breakdown • Higher-margin Old Navy and Athleta are 62% of company sales and on a path to 70% by 2023 • Highly-attractive online, strip, and street locations are ~80% of company sales BRAND C HANNE L REGION ■ Old Navy 54% ■ Online 45% ■ U.S. 86% ■ Gap 25% ■ Strip 30%(1) ■ Canada 6% ■
Slide 12: Delivering an omni-experience and extending our reach
Delivering an omni-experience and extending our reach Our leading omni-channel platform is allowing our customers to shop safely and seamlessly with us from anywhere 183 MILLION global customer file; representing 14% growth year-over-year in Q4 2020 (1) ~44% INCREASE in customers shopping online in
Slide 13: Rationalizing Our Store Fleet
Rationalizing Our Store Fleet Completed 228 Gap and Banana Republic net store closures globally in 2020 Gap Banana Republic 1843 1759 1531 ~1430 2018 2019 2020 2021E 13
Slide 14: Commitment to Environmental, Social & Governance Performance
Commitment to Environmental, Social & Governance Performance E N V I R O N M E N TA L SOCIAL GOVERNANCE 11.2B Ranked 100% 6 of 13 liters of water in HRC’s Corporate Directors saved in manufacturing Equality Index are women* since 2014 for the 14th year in a row *effective March 22, 2021 >65% 1,600+
Slide 15: Fiscal 2021 Outlook
FISCAL 2021 Outlook AS OF MARCH 4, 2021 Diluted Earnings per Share $1.20 - $1.35 Net Sales Growth Mid to high-teens Operating Margin About 5% Net Interest Expense About $210 million Effective Tax Rate About 25% Capital Expenditures About $800 million 15