Gap(GPS) - 2025 Q1 - Quarterly Results

Financial Performance - Net sales for the first quarter of fiscal 2024 were $3.4 billion, an increase of 3% year-over-year, with comparable sales also up 3%[3] - Gross margin improved to 41.2%, reflecting a 410 basis point increase from the previous year[3] - Operating income for the quarter was $205 million, resulting in an operating margin of 6.1%[3] - Old Navy's net sales reached $1.9 billion, up 5% year-over-year, with comparable sales increasing by 3%[7] - Gap's net sales were $689 million, flat compared to last year, but comparable sales rose by 3%[8] - Athleta's net sales were $329 million, up 2% year-over-year, with comparable sales increasing by 5%[12] - Net income for the quarter was $158 million, compared to a net loss of $18 million in the same period last year[31] - Earnings per share (EPS) for the quarter were $0.42 (basic) and $0.41 (diluted), compared to a loss of $0.05 per share in the previous year[31] Guidance and Projections - The company raised its full-year fiscal 2024 guidance for net sales and operating income growth due to strong first-quarter results[13] - Projected full-year fiscal 2024 operating income growth is expected to be in the mid-40% range compared to the previous year's adjusted operating income of $606 million[15] Cash and Investments - Ending cash and short-term investments increased by 48% year-over-year to $1.7 billion[10] - Cash, cash equivalents, and restricted cash at the end of the period totaled $1.561 billion, down from $1.901 billion at the beginning of the period[32] - The company reported a net cash provided by operating activities of $30 million for the quarter, compared to $15 million in the prior year[32] - Free cash flow for the 13 weeks ended May 4, 2024, was $(63) million, an improvement from $(102) million in the same period last year[35] - Net cash provided by operating activities increased to $30 million for the 13 weeks ended May 4, 2024, compared to $15 million for the same period in 2023[35] Store Operations - The company operated a total of 2,554 company-operated stores as of May 4, 2024, down from 2,562 stores at the end of the previous quarter[41] - Old Navy North America opened 5 new stores and closed 4 stores during the 13 weeks ended May 4, 2024, resulting in a net increase of 1 store[41] - Total square footage of company-operated stores remained at 30.5 million as of May 4, 2024[41] Historical Performance - Fiscal year 2023 net sales reached $14.9 billion, marking a significant presence in the specialty apparel market[28] - For the 13 weeks ended May 4, 2024, net sales increased to $3.388 billion from $3.276 billion in the same period last year, representing a growth of 3.4%[31] - Gross profit for the same period was $1.397 billion, up from $1.214 billion, indicating a gross margin improvement[31] - Operating income for the 13 weeks ended May 4, 2024, was $205 million, a turnaround from an operating loss of $10 million in the prior year[31] Restructuring and Costs - The company incurred $4 million in restructuring costs during the first quarter of fiscal year 2023, impacting operating expenses[37] - Adjusted operating income for the first quarter of fiscal year 2023 was $18 million, reflecting a 0.5% operating margin[37] - The company is focused on expanding its market presence and enhancing product offerings to drive future growth[28]