The Gap 2Q15 Earnings Call Notes

Old Navy is the model for the rest of the company

“Old Navy’s consistency continues to be a thing of beauty. It sits on a platform of product process that they have built over the last couple of years and now are pretty relentlessly executing season after season. It’s those same product processes that we are pretty follow-on in installing in Gap and Banana Republic and as I’ve said before, Old Navy remains our proof point for building products, executing trend, delivering on brand, on quality, on fit product consistency for the rest of the company.”

I’m not going to stand at the plate and call which fence we’re going to hit it over

“I’m not going to stand up at the plate and call which fence we’re going to hit it over, that’s not who I am, but I am confident that Gap will make significant progress in spring and very pleased with what I’ve seen in the women’s assortment and the turnaround in the women’s assortment.”

We will be going to in season open

“For the first time, we will be going to in season open in some of our key product programs and therefore able to get back in after we read the business in season with significant quantities of units. This is obviously an important capability for us. We are building this across the entire compan”

Continue to be very bullish on China

“we are continuing to be very bullish on our opportunity in China. We will process the currency devaluation, and the team is working on that right now. I don’t see that really giving us any significant headwinds as we think about the continued growth of the China business.”

There’s a lot of noise, but the consumer has confidence

“I would just like to address the fact that there is a lot of noise really out there right now around the apparel sector. And just so you know my perspective, I shut it out because from where I sit across all of our businesses, our job is to deliver regardless of the noise that’s out there today and what I see is, I see a consumer who has confidence, I see dollars being spent and I see an opportunity for us to continue to get more than our fair share, as I look forward and I am very optimistic”

We’re still a ways out from in season capabilities, but we’re moving quickly

“I’m not going to give you specific numbers here because we’re actually still a ways out and we are obviously trying to build this as quickly as we can and use it as quickly as we can.”

We’re fairly confident that denim has hit bottom

“we are pretty confident that the Denim cycle has hit bottom and it has been coming back over the last several months.”

The best marketing is a good product

“I feel pretty strongly about which is the best marketing is good product. And if I look at Gap as an example, we drove the strong business back a couple of years ago in spring of 2012 with modest marketing but exceptional product. And so what I can say is that, as we feel better about the product that will help us think about the marketing that we’re willing to put behind it.”