16 slides from Gap, Inc. (the)'s earnings presentation, Aug 26, 2021
Slide 1: Gap Inc. Fiscal 2021 Second Quarter Earnings Results
Gap Inc. Fiscal 2021 Sonia Syngal CHIEF EXECUTIVE OFFICER Katrina O’Connell CHIEF FINANCIAL OFFICER SECOND QUARTER 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: We grow purpose-led, billion-dollar lifestyle brands
We grow purpose-led, billion-dollar lifestyle brands
Slide 4: Power Plan 2023
Power Plan 2023 Power of our Brands Grow purpose-led, billion-dollar lifestyle brands Power of our Platform Leverage our omni capabilities and scaled operations, and extend our engineered approach to cost and growth Power of our Portfolio Extend customer reach across every age, body and occasion thr
Slide 5: Financial Highlights
Q2 2021 Financial Highlights • Record Q2 Sales of $4.2B were up 29% versus 2020 and up 5% versus 2019 o Strategic store closures and divestitures reduced net sales by ~8% and COVID-related closures resulted in an estimated 2% sales decline versus 2019 • Comparable sales up 3% versus 2020 and up 12%
Slide 6: P&L Summary (Reported)
Q2 2021 P&L Summary (REPORTED) Q2 Q2 Q2 2021 vs. Q2 Q2 2021 vs. ($ Millions) 2021 2020 Q2 2020 2019 (2) Q2 2019 Net Sales $4,211 $3,275 +29% $4,005 +5% Gross Profit $1,823 $1,149 +59% $1,556 +17% % of Sales 43.3% 35.1% +820 bps 38.9% +440 bps Merchandise Margin B/(W) +380 bps +110 bps ROD % of Sales
Slide 7: P&L Summary (Adjusted)
Q2 2021 P&L Summary (ADJUSTED) Q2 Q2 Q2 2021 vs. Q2 Q2 2021 vs. ($ Millions) 2021 2020 Q2 2020 2019 (2) Q2 2019 Net Sales $4,211 $3,275 +29% $4,005 +5% Gross Profit $1,823 $1,149 +59% $1,556 +17% % of Sales 43.3% 35.1% +820 bps 38.9% +440 bps Merchandise Margin B/(W) +380 bps +110 bps ROD % of Sales
Slide 8: Net Sales Growth
Q2 2021 Net Sales Growth vs. FY20 +29% +27% +24% +75% +28% vs. FY19 +5% +21% (10%) (15%) +35% Note: Due to the significant impact of COVID-related store closures last year, comparisons for the second quarter of 2019 are also included.
Slide 9: Comparable Sales
Q2 2021 Comparable Sales vs. FY20 +3% +0% (5%) +41% +13% vs. FY19 +12% +18% +3% (5%) +27% North America Comp vs. FY19: +12% Note: Due to the significant impact of COVID-related store closures last year, comparisons for the second quarter of 2019 are also included.
Slide 10: We have omni-strength in North America
We have omni-strength in North America • Higher-margin Old Navy and Athleta were 65% of company sales • Over 80% of revenue generated from online and off-mall locations • Over 90% of company sales generated in North America and partnering to amplify our reach Internationally BRAND C HANNE L REGION ■
Slide 11: Rationalizing our North America Fleet
Q2 2021 Rationalizing our North America Fleet • On-track to close ~350 N.A. Gap and Banana Republic stores by end of FY23 • Will have completed ~75% of North America closures by end of FY21 NORTH AMERICA STORE COUNT Banana Republic Gap 121 6 ~953 ~866 2019 2021E 2023E
Slide 12: Optimizing the Profitability of our Global Fleet
Optimizing the Profitability of our Global Fleet • Strategically closing underperforming store locations and partnering internationally to drive profitability • Investing in store growth for Old Navy and Athleta Gap Inc. Store Count ~60 openings 3345 ~2830 ~575 closures FYE 2019 North America Divest
Slide 13: Improving Value by Turning Customers into Lifetime Loyalists
Improving Value by Turning Customers into Lifetime Loyalists ~65 40+ MILLION MILLION active customers globally as members of our integrated of the end of Q2 2021 (1) loyalty program (2) (1) Refers to total number of customers who have made a purchase in the past 12 months. (2) Includes credit card h
Slide 14: Commitment to Environmental, Social & Governance Performance
Commitment to Environmental, Social & Governance Performance ENVIRONMENTAL SOCIAL GOVERNANCE 11.2B 1st Gap Inc. Equality + Belonging Report 5 of 12 liters of water released Directors saved in manufacturing to share progress on are women since 2017 2025 Commitments 65% 10K Annual Global Sustainabilit
Slide 15: Fueling our Future
Fueling our Future Accelerating Growth Through: • Strategic Category Expansion • Building Customer Lifetime Value • Digital Transformation
Slide 16: Fiscal 2021 Outlook
Q2 2021 Fiscal 2021 Outlook AS OF AUG. 26, 2021 Diluted Earnings per Share $1.90 - $2.05 Adjusted Diluted Earnings per Share (1) $2.10 - $2.25 Net Sales Growth (2) About 30% Operating Margin About 7% Adjusted Operating Margin (1) About 7.5% Effective Tax Rate About 25% Adjusted Effective Tax Rate (1