Q2 2024 Gap Inc Earnings Call Transcript
Key Points
- Gap Inc (GAP) delivered another successful quarter, exceeding financial expectations with net sales up 5% and comps up 3%.
- Old Navy posted comps up 5%, marking four consecutive quarters of positive growth.
- Gap Inc (GAP) expanded gross margin by 500 basis points and delivered an operating income of $293 million, with an operating margin of 7.9%.
- EPS increased to $0.54 from $0.32 in the second quarter of 2023.
- The company ended the quarter with a strong cash balance of $2.1 billion and generated nearly $400 million in free cash flow.
- Athleta’s comps were down 4% as the brand lapped heavy discounting.
- Banana Republic's net sales and comparable sales were flat, indicating ongoing challenges in stabilizing the brand.
- The company is facing a fluid global economic environment and uncertain consumer dynamics.
- The loss of the 53rd week in fiscal 2024 is expected to negatively impact net sales by approximately $160 million.
- SG&A as a percentage of net sales was 34.7%, deleveraging 10 basis points versus last year’s reported rate.
Good afternoon, everyone. I would like to welcome everyone to the Gap Inc. second-quarter 2024 earnings conference call. (Operator Instructions) I would now like to introduce your host Whitney Notaro, Head of Investor Relations.
Thank you and good afternoon, everyone. Welcome to Gap Inc's second-quarter fiscal 2024 earnings conference call. Before we begin, Iâd 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, the risk factors described in the companyâs annual report on Form 10-K 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.
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