☑
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Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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☐
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Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the transition period from to
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Delaware
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94-1697231
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(State of Incorporation)
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(I.R.S. Employer Identification No.)
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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Common Stock, $0.05 par value
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GPS
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The New York Stock Exchange
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Large accelerated filer
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☑
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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•
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intent to operate in a more rigorous and transformational manner;
|
•
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plans to restructure the Gap brand specialty fleet, including anticipated store closures and timing, associated pre-tax costs and charges, impact to annualized sales, and effect on annualized savings;
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•
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the potential impact of COVID-19 on both our projected customer demand and supply chain, as well as our consolidated financial position, consolidated results of operations, and consolidated cash flows in fiscal 2020;
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•
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improving inventory productivity by leveraging responsive capabilities;
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•
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investing in digital and customer capabilities, as well as store experience;
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•
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increasing productivity by leveraging our scale and streamlining operations and processes;
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•
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attracting and retaining strong talent in our businesses and functions;
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•
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continuing to integrate social and environmental sustainability into business practices;
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•
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investing strategically in the business while maintaining operating expense discipline;
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•
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transforming our product to market process;
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•
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continuing our investment in customer experience to drive higher customer engagement and loyalty;
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•
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continuing to invest in strengthening our brand awareness, customer acquisition, and digital capabilities;
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•
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utilizing data, analytics, and technology to respond faster while making decisions;
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•
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store openings and closings in fiscal 2020;
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•
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impact of foreign currency exchange rate fluctuations in fiscal 2020;
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•
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extinguishing our 5.95 percent notes due April 2021, and entering into a new long-term debt arrangement and a new secured revolving credit facility;
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•
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current cash balances and cash flows being sufficient to support our business operations, and the expected impact of extensive store closures on our need for additional credit;
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•
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ability to supplement near-term liquidity, if necessary, with our $500 million revolving credit facility or other available market instruments;
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•
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the impact of the seasonality of our operations;
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•
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dividend payments in fiscal 2020;
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•
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the impact if actuals differ substantially from estimates and assumptions used in accounting calculations and policies;
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•
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the impact of recent accounting pronouncements;
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•
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recognition of revenue deferrals as revenue;
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•
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impact of violating financial and other covenants under our five-year, unsecured revolving credit facility;
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•
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unrealized gains and losses from designated cash flow hedges;
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•
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recognition of unrecognized share-based compensation expense;
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•
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total gross unrecognized tax benefits;
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•
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the impact of losses due to indemnification obligations;
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•
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the outcome of proceedings, lawsuits, disputes, and claims; and
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•
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the impact of changes in internal control over financial reporting.
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•
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the risk that we or our franchisees will be unsuccessful in gauging apparel trends and changing consumer preferences;
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•
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the highly competitive nature of our business in the United States and internationally;
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•
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engaging in or seeking to engage in strategic transactions that are subject to various risks and uncertainties;
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•
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the risk that failure to maintain, enhance and protect our brand image could have an adverse effect on our results of operations;
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•
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the risk that the failure to manage key executive succession and retention and to continue to attract qualified personnel could have an adverse impact on our results of operations;
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•
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the risk that our investments in customer, digital, and omni-channel shopping initiatives may not deliver the results we anticipate;
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•
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the risk that if we are unable to manage our inventory effectively, our gross margins will be adversely affected;
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•
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the risks to our business, including our costs and supply chain, associated with global sourcing and manufacturing;
|
•
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the risk that we are subject to data or other security breaches that may result in increased costs, violations of law, significant legal and financial exposure, and a loss of confidence in our security measures, which could have an adverse effect on our results of operations and our reputation;
|
•
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the risk that a failure of, or updates or changes to, our information technology (“IT”) systems may disrupt our operations;
|
•
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the risk that changes in global economic conditions or consumer spending patterns could adversely impact our results of operations;
|
•
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the risks to our efforts to expand internationally, including our ability to operate in regions where we have less experience;
|
•
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the risk that we or our franchisees will be unsuccessful in identifying, negotiating, and securing new store locations and renewing, modifying, or terminating leases for existing store locations effectively;
|
•
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the risks to our reputation or operations associated with importing merchandise from foreign countries, including failure of our vendors to adhere to our Code of Vendor Conduct;
|
•
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the risk that our franchisees’ operation of franchise stores is not directly within our control and could impair the value of our brands;
|
•
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the risk that trade matters could increase the cost or reduce the supply of apparel available to us and adversely affect our business, financial condition, and results of operations;
|
•
|
the risk that foreign currency exchange rate fluctuations could adversely impact our financial results;
|
•
|
the risk that comparable sales and margins will experience fluctuations;
|
•
|
the risk that changes in our credit profile or deterioration in market conditions may limit our access to the capital markets and adversely impact our financial results or our business initiatives;
|
•
|
the risk that changes in the regulatory or administrative landscape could adversely affect our financial condition and results of operations;
|
•
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the risk that natural disasters, public health crises, political crises, negative global climate patterns, or other catastrophic events could adversely affect our operations and financial results, or those of our franchisees or vendors;
|
•
|
the risk that reductions in income and cash flow from our credit card arrangement related to our private label and co-branded credit cards could adversely affect our operating results and cash flows;
|
•
|
the risk that the adoption of new accounting pronouncements will impact future results;
|
•
|
the risk that we do not repurchase some or all of the shares we anticipate purchasing pursuant to our repurchase program; and
|
•
|
the risk that we will not be successful in defending various proceedings, lawsuits, disputes, and claims.
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Page
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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||
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Item 13.
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||
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Item 14.
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PART IV
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Item 15.
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||
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Item 16.
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•
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anticipating and quickly responding to changing apparel trends and customer demands;
|
•
|
attracting customer traffic both in stores and online;
|
•
|
competitively pricing our products and achieving customer perception of value;
|
•
|
maintaining favorable brand recognition and effectively marketing our products to customers in several diverse market segments and geographic locations;
|
•
|
anticipating and responding to changing customer shopping preferences and practices, including the increasing shift to digital brand engagement, social media communication, and online shopping;
|
•
|
developing innovative, high-quality products in sizes, colors, and styles that appeal to customers of varying age groups and tastes;
|
•
|
purchasing and stocking merchandise to match seasonal weather patterns, and our ability to react to shifts in weather that impact consumer demand;
|
•
|
sourcing and allocating merchandise efficiently; and
|
•
|
improving the effectiveness and efficiency of our processes in order to deliver cost savings to fund growth.
|
|
|
1/31/2015
|
|
1/30/2016
|
|
1/28/2017
|
|
2/3/2018
|
|
2/2/2019
|
|
2/1/2020
|
||||||||||||
The Gap, Inc.
|
|
$
|
100.00
|
|
|
$
|
61.73
|
|
|
$
|
58.63
|
|
|
$
|
86.27
|
|
|
$
|
69.54
|
|
|
$
|
50.97
|
|
S&P 500
|
|
$
|
100.00
|
|
|
$
|
99.33
|
|
|
$
|
119.24
|
|
|
$
|
150.73
|
|
|
$
|
147.24
|
|
|
$
|
179.17
|
|
Dow Jones U.S. Apparel Retailers
|
|
$
|
100.00
|
|
|
$
|
98.72
|
|
|
$
|
97.30
|
|
|
$
|
110.74
|
|
|
$
|
120.36
|
|
|
$
|
134.15
|
|
|
|
Total Number
of Shares
Purchased (1)
|
|
Average
Price Paid
Per Share
Including
Commissions
|
|
Total Number
of Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs
|
|
Maximum Number
(or approximate
dollar amount) of
Shares that May
Yet be Purchased
Under the Plans or
Programs (2)
|
||||
Month #1 (November 3 - November 30)
|
|
268,696
|
|
|
$
|
16.97
|
|
|
268,696
|
|
|
$845 million
|
Month #2 (December 1 - January 4)
|
|
1,535,779
|
|
|
$
|
17.07
|
|
|
1,535,779
|
|
|
$819 million
|
Month #3 (January 5 - February 1)
|
|
1,067,331
|
|
|
$
|
18.01
|
|
|
1,067,331
|
|
|
$800 million
|
Total
|
|
2,871,806
|
|
|
$
|
17.41
|
|
|
2,871,806
|
|
|
|
(1)
|
Excludes shares withheld to settle employee statutory tax withholding related to the vesting of stock units.
|
(2)
|
On February 25, 2016, we announced that the Board of Directors approved a $1 billion share repurchase authorization (the "February 2016 repurchase program"), which had no expiration date. On February 26, 2019, we announced that the Board of Directors approved a $1 billion share repurchase authorization (the "February 2019 repurchase program"), which superseded the February 2016 repurchase program and has no expiration date.
|
|
|
Fiscal Year (number of weeks)
|
||||||||||||||||||
|
|
2019 (52) (b)
|
|
2018 (52) (c)
|
|
2017 (53) (d)
|
|
2016 (52)
|
|
2015 (52)
|
||||||||||
Operating Results ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales (a)
|
|
$
|
16,383
|
|
|
$
|
16,580
|
|
|
$
|
15,855
|
|
|
$
|
15,516
|
|
|
$
|
15,797
|
|
Gross margin
|
|
37.4
|
%
|
|
38.1
|
%
|
|
38.3
|
%
|
|
36.3
|
%
|
|
36.2
|
%
|
|||||
Operating margin
|
|
3.5
|
%
|
|
8.2
|
%
|
|
9.3
|
%
|
|
7.7
|
%
|
|
9.6
|
%
|
|||||
Effective tax rate
|
|
33.5
|
%
|
|
24.1
|
%
|
|
40.4
|
%
|
|
39.9
|
%
|
|
37.5
|
%
|
|||||
Net income
|
|
$
|
351
|
|
|
$
|
1,003
|
|
|
$
|
848
|
|
|
$
|
676
|
|
|
$
|
920
|
|
Cash dividends paid
|
|
$
|
364
|
|
|
$
|
373
|
|
|
$
|
361
|
|
|
$
|
367
|
|
|
$
|
377
|
|
Per Share Data (number of shares in millions)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings per share
|
|
$
|
0.93
|
|
|
$
|
2.61
|
|
|
$
|
2.16
|
|
|
$
|
1.69
|
|
|
$
|
2.24
|
|
Diluted earnings per share
|
|
$
|
0.93
|
|
|
$
|
2.59
|
|
|
$
|
2.14
|
|
|
$
|
1.69
|
|
|
$
|
2.23
|
|
Weighted-average number of shares—basic
|
|
376
|
|
|
385
|
|
|
393
|
|
|
399
|
|
|
411
|
|
|||||
Weighted-average number of shares—diluted
|
|
378
|
|
|
388
|
|
|
396
|
|
|
400
|
|
|
413
|
|
|||||
Cash dividends declared and paid per share
|
|
$
|
0.97
|
|
|
$
|
0.97
|
|
|
$
|
0.92
|
|
|
$
|
0.92
|
|
|
$
|
0.92
|
|
Balance Sheet Information ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Merchandise inventory
|
|
$
|
2,156
|
|
|
$
|
2,131
|
|
|
$
|
1,997
|
|
|
$
|
1,830
|
|
|
$
|
1,873
|
|
Total assets (e)
|
|
$
|
13,679
|
|
|
$
|
8,049
|
|
|
$
|
7,989
|
|
|
$
|
7,610
|
|
|
$
|
7,473
|
|
Working capital (e)
|
|
$
|
1,307
|
|
|
$
|
2,077
|
|
|
$
|
2,107
|
|
|
$
|
1,862
|
|
|
$
|
1,450
|
|
Total long-term debt, less current maturities
|
|
$
|
1,249
|
|
|
$
|
1,249
|
|
|
$
|
1,249
|
|
|
$
|
1,248
|
|
|
$
|
1,310
|
|
Stockholders’ equity
|
|
$
|
3,316
|
|
|
$
|
3,553
|
|
|
$
|
3,144
|
|
|
$
|
2,904
|
|
|
$
|
2,545
|
|
Other Data ($ and square footage in millions)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash used for purchases of property and equipment
|
|
$
|
702
|
|
|
$
|
705
|
|
|
$
|
731
|
|
|
$
|
524
|
|
|
$
|
726
|
|
Percentage increase (decrease) in comparable sales
|
|
(3
|
)%
|
|
—
|
%
|
|
3
|
%
|
|
(2
|
)%
|
|
(4
|
)%
|
|||||
Number of Company-operated store locations open at year-end
|
|
3,345
|
|
|
3,194
|
|
|
3,165
|
|
|
3,200
|
|
|
3,275
|
|
|||||
Number of franchise store locations open at year-end
|
|
574
|
|
|
472
|
|
|
429
|
|
|
459
|
|
|
446
|
|
|||||
Number of total store locations open at year-end
|
|
3,919
|
|
|
3,666
|
|
|
3,594
|
|
|
3,659
|
|
|
3,721
|
|
|||||
Square footage of Company-operated store space at year-end
|
|
37.0
|
|
|
36.7
|
|
|
36.4
|
|
|
36.7
|
|
|
37.9
|
|
|||||
Percentage increase (decrease) in square footage of Company-operated store space at year-end
|
|
0.8
|
%
|
|
0.8
|
%
|
|
(0.8
|
)%
|
|
(3.2
|
)%
|
|
(0.5
|
)%
|
|||||
Number of employees at year-end
|
|
129,000
|
|
|
135,000
|
|
|
135,000
|
|
|
135,000
|
|
|
141,000
|
|
(a)
|
Net sales for fiscal 2019 and 2018 reflect the adoption of the new revenue recognition standard. Prior period amounts have not been restated and continue to be reported under accounting standards in effect for those periods.
|
(b)
|
In fiscal 2019, the Company incurred $301 million of separation-related costs, $296 million of flagship impairment charges, and $61 million of specialty fleet restructuring costs, all on a pre-tax basis. There was also a pre-tax $191 million gain on the sale of a building during fiscal 2019. Additionally, there was a $30 million impact to net income related to an adjustment to our fiscal 2017 tax liability for additional guidance issued by the U.S. Treasury Department regarding the Tax Cuts and Jobs Act. The total fiscal 2019 net unfavorable impact to diluted EPS was $1.04 for these items.
|
(c)
|
In fiscal 2018, the effective tax rate reflects the benefits of the enactment of the Tax Cuts and Jobs Act on December 22, 2017.
|
(d)
|
In fiscal 2017, the Company recognized a net provisional tax impact of approximately $34 million, which represents the provisional tax impact of federal tax reform of $57 million, net of a related $23 million benefit related to legal entity structuring that was also impacted by tax reform. Fiscal 2017 results also include incremental sales attributable to the 53rd week.
|
(e)
|
Total assets and working capital for fiscal 2019 reflect the adoption of the new lease standard. Prior period amounts have not been restated and continue to be reported under accounting standards in effect for those periods.
|
|
|
Fiscal Year
|
||
(in millions)
|
|
2019
|
||
Information technology-related costs (1)
|
|
$
|
203
|
|
Consulting and advisory service fees
|
|
77
|
|
|
Other expenses
|
|
21
|
|
|
Total separation-related costs
|
|
$
|
301
|
|
(1)
|
Includes approximately $61 million related to loss on disposal of property and equipment for capital assets with no alternative future use.
|
•
|
Net sales for fiscal 2019 decreased 1 percent to $16.4 billion compared with $16.6 billion for fiscal 2018.
|
•
|
Comparable sales for fiscal 2019 decreased 3 percent compared with fiscal 2018.
|
•
|
Gross profit for fiscal 2019 was $6.1 billion compared with $6.3 billion for fiscal 2018. Gross margin for fiscal 2019 was 37.4 percent compared with 38.1 percent for fiscal 2018.
|
•
|
Operating margin for fiscal 2019 was 3.5 percent compared with 8.2 percent for fiscal 2018. Operating margin for fiscal 2019 included a 3 percent net unfavorable impact due to separation-related costs, flagship impairment charges, specialty fleet restructuring costs, and a gain on the sale of a building.
|
•
|
Effective tax rate for fiscal 2019 was 33.5 percent compared with 24.1 percent for fiscal 2018, which included an increase related to an adjustment to our fiscal 2017 tax liability for additional guidance issued by the U.S. Treasury Department regarding the Tax Cuts and Jobs Act of 2017 (the “TCJA”).
|
•
|
Net income for fiscal 2019 was $351 million compared with $1,003 million for fiscal 2018, and diluted earnings per share was $0.93 for fiscal 2019 compared with $2.59 for fiscal 2018. Diluted earnings per share for fiscal 2019 included a $1.04 net unfavorable impact due to separation-related costs, flagship impairment charges, specialty fleet restructuring costs, the above mentioned tax adjustment related to the TCJA, and a gain on the sale of a building.
|
•
|
During fiscal 2019, we paid dividends of $364 million compared with $373 million during fiscal 2018.
|
•
|
During fiscal 2019, share repurchases were $200 million compared with $398 million for fiscal 2018.
|
•
|
offering product that is consistently brand-appropriate and on-trend with high customer acceptance and appropriate value perception;
|
•
|
restructuring the Gap brand, with emphasis on the specialty fleet globally, to create a healthier, more profitable business;
|
•
|
attracting and retaining strong talent in our businesses and functions;
|
•
|
increasing the focus on improving operational discipline and efficiency by streamlining operations and processes throughout the organization and leveraging our scale;
|
•
|
managing inventory to support a healthy merchandise margin; and
|
•
|
Continuing to integrate social and environmental sustainability into business practices to support long term growth.
|
|
|
Fiscal Year
|
|||||||
|
|
2019
|
|
2018
|
|
2017
|
|||
Old Navy Global
|
|
(2
|
)%
|
|
3
|
%
|
|
6
|
%
|
Gap Global
|
|
(7
|
)%
|
|
(5
|
)%
|
|
(1
|
)%
|
Banana Republic Global
|
|
(2
|
)%
|
|
1
|
%
|
|
(2
|
)%
|
Athleta
|
|
5
|
%
|
|
9
|
%
|
|
16
|
%
|
The Gap, Inc.
|
|
(3
|
)%
|
|
—
|
%
|
|
3
|
%
|
|
|
Fiscal Year
|
||||||||||
|
|
2019 (2)
|
|
2018 (2)
|
|
2017 (3)
|
||||||
Net sales per average square foot (1)
|
|
$
|
323
|
|
|
$
|
341
|
|
|
$
|
340
|
|
(1)
|
Excludes net sales associated with our online and franchise businesses. Online sales include sales through our online channels including ship-from-store sales, buy online pick-up in store, and order-in-store.
|
(2)
|
Reflects the adoption of the new revenue recognition standard in fiscal 2018. Prior period amounts have not been restated and continue to be reported under accounting standards in effect for those periods.
|
(3)
|
Fiscal 2017 includes incremental sales attributable to the 53rd week.
|
|
|
February 2, 2019
|
|
Fiscal 2019
|
|
February 1, 2020
|
|||||||||
|
|
Number of
Store Locations
|
|
Number of
Stores Opened
|
|
Number of
Stores Closed (3)
|
|
Number of
Store Locations
|
|
Square Footage
(in millions)
|
|||||
Old Navy North America
|
|
1,139
|
|
|
73
|
|
|
5
|
|
|
1,207
|
|
|
19.5
|
|
Old Navy Asia (1)
|
|
15
|
|
|
4
|
|
|
2
|
|
|
17
|
|
|
0.2
|
|
Gap North America
|
|
758
|
|
|
4
|
|
|
87
|
|
|
675
|
|
|
7.1
|
|
Gap Asia
|
|
332
|
|
|
61
|
|
|
35
|
|
|
358
|
|
|
3.2
|
|
Gap Europe
|
|
152
|
|
|
4
|
|
|
19
|
|
|
137
|
|
|
1.1
|
|
Banana Republic North America
|
|
556
|
|
|
9
|
|
|
24
|
|
|
541
|
|
|
4.6
|
|
Banana Republic Asia
|
|
45
|
|
|
5
|
|
|
2
|
|
|
48
|
|
|
0.2
|
|
Athleta North America
|
|
161
|
|
|
29
|
|
|
—
|
|
|
190
|
|
|
0.8
|
|
Intermix North America
|
|
36
|
|
|
—
|
|
|
3
|
|
|
33
|
|
|
0.1
|
|
Janie and Jack North America (2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
139
|
|
|
0.2
|
|
Company-operated stores total
|
|
3,194
|
|
|
189
|
|
|
177
|
|
|
3,345
|
|
|
37.0
|
|
Franchise
|
|
472
|
|
|
140
|
|
|
38
|
|
|
574
|
|
|
N/A
|
|
Total
|
|
3,666
|
|
|
329
|
|
|
215
|
|
|
3,919
|
|
|
37.0
|
|
Increase over prior year
|
|
|
|
|
|
|
|
6.9
|
%
|
|
0.8
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
February 3, 2018
|
|
Fiscal 2018
|
|
February 2, 2019
|
|||||||||
|
|
Number of
Store Locations
|
|
Number of
Stores Opened
|
|
Number of
Stores Closed
|
|
Number of
Store Locations
|
|
Square Footage
(in millions)
|
|||||
Old Navy North America
|
|
1,066
|
|
|
79
|
|
|
6
|
|
|
1,139
|
|
|
18.6
|
|
Old Navy Asia
|
|
14
|
|
|
1
|
|
|
—
|
|
|
15
|
|
|
0.2
|
|
Gap North America
|
|
810
|
|
|
14
|
|
|
66
|
|
|
758
|
|
|
7.9
|
|
Gap Asia
|
|
313
|
|
|
34
|
|
|
15
|
|
|
332
|
|
|
3.1
|
|
Gap Europe
|
|
155
|
|
|
9
|
|
|
12
|
|
|
152
|
|
|
1.2
|
|
Banana Republic North America
|
|
576
|
|
|
9
|
|
|
29
|
|
|
556
|
|
|
4.7
|
|
Banana Republic Asia
|
|
45
|
|
|
3
|
|
|
3
|
|
|
45
|
|
|
0.2
|
|
Athleta North America
|
|
148
|
|
|
14
|
|
|
1
|
|
|
161
|
|
|
0.7
|
|
Intermix North America
|
|
38
|
|
|
—
|
|
|
2
|
|
|
36
|
|
|
0.1
|
|
Company-operated stores total
|
|
3,165
|
|
|
163
|
|
|
134
|
|
|
3,194
|
|
|
36.7
|
|
Franchise
|
|
429
|
|
|
90
|
|
|
47
|
|
|
472
|
|
|
N/A
|
|
Total
|
|
3,594
|
|
|
253
|
|
|
181
|
|
|
3,666
|
|
|
36.7
|
|
Increase over prior year
|
|
|
|
|
|
|
|
2.0
|
%
|
|
0.8
|
%
|
(1)
|
We intend to close our Old Navy stores in China by early 2020.
|
(2)
|
On March 4, 2019, we acquired select assets of Gymboree Group, Inc. related to Janie and Jack. The 140 stores acquired were not included as store openings for fiscal 2019; however, they are included in the ending number of store locations as of February 1, 2020, net of one closure that occurred in the third quarter of fiscal 2019.
|
(3)
|
Store closures for fiscal 2019 include closures related to our specialty fleet rationalization efforts. See Note 19 of Notes to Consolidated Financial Statements included in Item 8, Financial Statements and Supplementary Data, of this Form 10-K for information about store closing and other operating cost.
|
($ in millions)
|
|
Fiscal Year
|
||||||||||
2019
|
|
2018
|
|
2017
|
||||||||
Cost of goods sold and occupancy expenses
|
|
$
|
10,250
|
|
|
$
|
10,258
|
|
|
$
|
9,789
|
|
Gross profit
|
|
$
|
6,133
|
|
|
$
|
6,322
|
|
|
$
|
6,066
|
|
Cost of goods sold and occupancy expenses as a percentage of net sales
|
|
62.6
|
%
|
|
61.9
|
%
|
|
61.7
|
%
|
|||
Gross margin
|
|
37.4
|
%
|
|
38.1
|
%
|
|
38.3
|
%
|
•
|
Cost of goods sold increased 0.6 percentage points as a percentage of net sales in fiscal 2019 compared with fiscal 2018, primarily driven by higher promotional activity at Old Navy Global.
|
•
|
Occupancy expenses increased 0.1 percentage points as a percentage of net sales in fiscal 2019 compared with fiscal 2018, primarily driven by a decrease in net sales without a corresponding decrease in occupancy expenses.
|
•
|
Cost of goods sold increased 0.7 percentage points as a percentage of net sales in fiscal 2018 compared with fiscal 2017, primarily driven by lower product margin at Gap Global and higher online shipping costs. This was partially offset by a favorable impact from presentation changes resulting from the adoption of the new revenue recognition standard.
|
•
|
Occupancy expenses decreased 0.5 percentage points as a percentage of net sales in fiscal 2018 compared with fiscal 2017, primarily driven by presentation changes resulting from the adoption of the new revenue recognition standard.
|
($ in millions)
|
|
Fiscal Year
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
|||||||
Operating expenses
|
|
$
|
5,559
|
|
|
$
|
4,960
|
|
|
$
|
4,587
|
|
Operating expenses as a percentage of net sales
|
|
33.9
|
%
|
|
29.9
|
%
|
|
28.9
|
%
|
|||
Operating margin
|
|
3.5
|
%
|
|
8.2
|
%
|
|
9.3
|
%
|
•
|
an increase due to separation-related costs of $300 million, global flagship impairment charges of $296 million, operating expenses related to Janie and Jack, and specialty fleet restructuring costs of $39 million, incurred in fiscal 2019 and not present in fiscal 2018;
|
•
|
an increase in expenses related to information technology;
|
•
|
an increase in bonus expense compared with a lower fiscal 2018 bonus expense;
|
•
|
an increase in advertising expenses due to increased spending at Old Navy Global and Athleta;
|
•
|
a gain on the sale of a building that occurred during fiscal 2019 of $191 million.
|
•
|
an increase of $443 million related to the presentation changes resulting from the adoption of new revenue recognition standard; and
|
•
|
a gain from insurance proceeds of $64 million during fiscal 2017 related to the fire that occurred at the Fishkill, New York Company-owned distribution center;
|
•
|
a decrease in expenses related to payroll and benefits, primarily driven by a decrease in bonus expense.
|
($ in millions)
|
|
Fiscal Year
|
||||||||||
2019
|
|
2018
|
|
2017
|
||||||||
Interest expense
|
|
$
|
76
|
|
|
$
|
73
|
|
|
$
|
74
|
|
($ in millions)
|
|
Fiscal Year
|
||||||||||
2019
|
|
2018
|
|
2017
|
||||||||
Income taxes
|
|
$
|
177
|
|
|
$
|
319
|
|
|
$
|
576
|
|
Effective tax rate
|
|
33.5
|
%
|
|
24.1
|
%
|
|
40.4
|
%
|
($ in millions)
|
|
February 1,
2020 |
|
February 2,
2019 |
||||
Cash and cash equivalents
|
|
$
|
1,364
|
|
|
$
|
1,081
|
|
Short-term investments
|
|
$
|
290
|
|
|
$
|
288
|
|
Debt
|
|
$
|
1,249
|
|
|
$
|
1,249
|
|
Working capital (1)
|
|
$
|
1,307
|
|
|
$
|
2,077
|
|
Current ratio (1)
|
|
1.41:1
|
|
|
1.96:1
|
|
(1)
|
Current liabilities for fiscal 2019 reflect the adoption of the new lease accounting standard. Prior period amounts have not been restated and continue to be reported under accounting standards in effect for those periods.
|
•
|
a decrease in net income.
|
•
|
an increase of $239 million due to non-cash impairment charges of operating lease assets in fiscal 2019; partially offset by
|
•
|
$191 million decrease due to gain on the sale of a building during fiscal 2019.
|
•
|
an increase of $306 million related to accrued expenses and other current liabilities primarily due to a significant decrease in bonus accrual in fiscal 2018 combined with an increase in accruals in fiscal 2019 due to separation-related costs;
|
•
|
an increase of $158 million related to merchandise inventory primarily due to flat inventory during fiscal 2019 compared with an increase in inventory during fiscal 2018; and
|
•
|
an increase of $144 million related to timing of payments for accounts payable.
|
•
|
an increase in net income.
|
•
|
an increase of $165 million related to income taxes payable, net of prepaid and other tax-related items, driven primarily by the timing of payments; offset by
|
•
|
a decrease of $230 million related to accrued expenses and other current liabilities, driven primarily by a decrease in bonus accrual for fiscal 2018 compared with an increase for fiscal 2017; and
|
•
|
a decrease of $51 million related to other current assets and long-term assets driven in part by the receipt of insurance claims receivable related to the Fishkill fire during fiscal 2017.
|
•
|
$287 million fewer net purchases of available-for-sale debt securities during fiscal 2019 compared with fiscal 2018; and
|
•
|
$220 million of proceeds received for the sale of a building during fiscal 2019; partially offset by
|
•
|
$343 million purchase of a building during fiscal 2019; and
|
•
|
$69 million purchase of Janie and Jack during fiscal 2019.
|
•
|
$287 million of net purchases of available-for-sale securities during fiscal 2018; and
|
•
|
$66 million of insurance proceeds allocated to the loss on property and equipment during fiscal 2017.
|
•
|
$83 million higher repurchases of common stock during fiscal 2018; offset by
|
•
|
$67 million cash outflow related to the final repayment of the Japan term loan during fiscal 2017.
|
|
|
Fiscal Year
|
||||||||||
($ in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net cash provided by operating activities
|
|
$
|
1,411
|
|
|
$
|
1,381
|
|
|
$
|
1,380
|
|
Less: Purchases of property and equipment (1)
|
|
(702
|
)
|
|
(705
|
)
|
|
(731
|
)
|
|||
Add: Insurance proceeds related to loss on property and equipment
|
|
—
|
|
|
—
|
|
|
66
|
|
|||
Free cash flow
|
|
$
|
709
|
|
|
$
|
676
|
|
|
$
|
715
|
|
(1)
|
Excludes purchase of building in the first quarter of fiscal 2019.
|
|
|
Payments Due by Period
|
||||||||||||||||||
($ in millions)
|
|
Less than 1
Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More Than 5
Years
|
|
Total
|
||||||||||
Debt (1)
|
|
$
|
—
|
|
|
$
|
1,250
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,250
|
|
Interest payments on debt
|
|
75
|
|
|
37
|
|
|
—
|
|
|
—
|
|
|
112
|
|
|||||
Operating leases (2)
|
|
1,185
|
|
|
2,005
|
|
|
1,587
|
|
|
3,172
|
|
|
7,949
|
|
|||||
Purchase obligations and commitments (3)
|
|
3,860
|
|
|
97
|
|
|
29
|
|
|
62
|
|
|
4,048
|
|
|||||
Total contractual cash obligations
|
|
$
|
5,120
|
|
|
$
|
3,389
|
|
|
$
|
1,616
|
|
|
$
|
3,234
|
|
|
$
|
13,359
|
|
(1)
|
Represents principal maturities, excluding interest. See Note 5 of Notes to Consolidated Financial Statements included in Item 8, Financial Statements and Supplementary Data for discussion on debt.
|
(2)
|
Excludes contingent rent obligations and variable maintenance, insurance, taxes and, other occupancies. See Note 12 of Notes to Consolidated Financial Statements included in Item 8, Financial Statements and Supplementary Data for discussion of our operating leases.
|
(3)
|
Represents estimated open purchase orders to purchase inventory as well as commitments for products and services used in the normal course of business. The amounts included in the table above also include the remaining federal income tax payable for the TCJA one-time transition tax on the deemed repatriation of foreign income.
|
|
|
|
Page
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
We tested the effectiveness of controls over management’s long-lived store asset impairment evaluation, including those over future sales and gross profit projections
|
•
|
We evaluated management’s ability to accurately forecast future sales and gross profit growth by comparing actual results to management’s historical forecasts
|
•
|
We evaluated the reasonableness of management’s sales and gross profit growth forecasts by comparing the forecasts to:
|
◦
|
Historical revenue and operating margins
|
◦
|
Internal communications to management and the Board of Directors
|
•
|
We tested the effectiveness of controls over the estimation of the market rent utilized in the estimate of the fair value of operating lease assets
|
•
|
With the assistance of our fair value specialists, evaluated that the methods used by management to develop the estimated market rent utilized in the fair value of the operating lease assets
|
•
|
We tested the effectiveness of controls over the calculation of the IBRs, including those over credit ratings, credit spreads and adjustments for the impact of collateral
|
•
|
With the assistance of our fair value specialists, we:
|
◦
|
Evaluated that the methods used by management were based on the definitions and guidance in ASC 842
|
◦
|
Assessed the reasonableness of the credit rating, base rate, spreads and adjustments for the effects of collateral applied in determining the IBR by comparing to Company specific benchmarks, comparable companies and other market information
|
◦
|
Assessed the reasonableness of the models and the mathematical accuracy of the calculation used to estimate the IBR
|
($ and shares in millions except par value)
|
|
February 1,
2020 |
|
February 2,
2019 |
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
1,364
|
|
|
$
|
1,081
|
|
Short-term investments
|
|
290
|
|
|
288
|
|
||
Merchandise inventory
|
|
2,156
|
|
|
2,131
|
|
||
Other current assets
|
|
706
|
|
|
751
|
|
||
Total current assets
|
|
4,516
|
|
|
4,251
|
|
||
Property and equipment, net of accumulated depreciation of $5,839 and $5,755
|
|
3,122
|
|
|
2,912
|
|
||
Operating lease assets
|
|
5,402
|
|
|
—
|
|
||
Other long-term assets
|
|
639
|
|
|
886
|
|
||
Total assets
|
|
$
|
13,679
|
|
|
$
|
8,049
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
1,174
|
|
|
$
|
1,126
|
|
Accrued expenses and other current liabilities
|
|
1,067
|
|
|
1,024
|
|
||
Current portion of operating lease liabilities
|
|
920
|
|
|
—
|
|
||
Income taxes payable
|
|
48
|
|
|
24
|
|
||
Total current liabilities
|
|
3,209
|
|
|
2,174
|
|
||
Long-term liabilities:
|
|
|
|
|
||||
Long-term debt
|
|
1,249
|
|
|
1,249
|
|
||
Long-term operating lease liabilities
|
|
5,508
|
|
|
—
|
|
||
Lease incentives and other long-term liabilities
|
|
397
|
|
|
1,073
|
|
||
Total long-term liabilities
|
|
7,154
|
|
|
2,322
|
|
||
Commitments and contingencies (see Note 16)
|
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
|
||||
Common stock $0.05 par value
|
|
|
|
|
||||
Authorized 2,300 shares for all periods presented; Issued and Outstanding 371 and 378 shares
|
|
19
|
|
|
19
|
|
||
Additional paid-in capital
|
|
—
|
|
|
—
|
|
||
Retained earnings
|
|
3,257
|
|
|
3,481
|
|
||
Accumulated other comprehensive income
|
|
40
|
|
|
53
|
|
||
Total stockholders' equity
|
|
3,316
|
|
|
3,553
|
|
||
Total liabilities and stockholders' equity
|
|
$
|
13,679
|
|
|
$
|
8,049
|
|
|
|
Fiscal Year
|
||||||||||
($ and shares in millions except per share amounts)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net sales
|
|
$
|
16,383
|
|
|
$
|
16,580
|
|
|
$
|
15,855
|
|
Cost of goods sold and occupancy expenses
|
|
10,250
|
|
|
10,258
|
|
|
9,789
|
|
|||
Gross profit
|
|
6,133
|
|
|
6,322
|
|
|
6,066
|
|
|||
Operating expenses
|
|
5,559
|
|
|
4,960
|
|
|
4,587
|
|
|||
Operating income
|
|
574
|
|
|
1,362
|
|
|
1,479
|
|
|||
Interest expense
|
|
76
|
|
|
73
|
|
|
74
|
|
|||
Interest income
|
|
(30
|
)
|
|
(33
|
)
|
|
(19
|
)
|
|||
Income before income taxes
|
|
528
|
|
|
1,322
|
|
|
1,424
|
|
|||
Income taxes
|
|
177
|
|
|
319
|
|
|
576
|
|
|||
Net income
|
|
$
|
351
|
|
|
$
|
1,003
|
|
|
$
|
848
|
|
Weighted-average number of shares—basic
|
|
376
|
|
|
385
|
|
|
393
|
|
|||
Weighted-average number of shares—diluted
|
|
378
|
|
|
388
|
|
|
396
|
|
|||
Earnings per share—basic
|
|
$
|
0.93
|
|
|
$
|
2.61
|
|
|
$
|
2.16
|
|
Earnings per share—diluted
|
|
$
|
0.93
|
|
|
$
|
2.59
|
|
|
$
|
2.14
|
|
Cash dividends declared and paid per share
|
|
$
|
0.97
|
|
|
$
|
0.97
|
|
|
$
|
0.92
|
|
|
|
Fiscal Year
|
||||||||||
($ in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net income
|
|
$
|
351
|
|
|
$
|
1,003
|
|
|
$
|
848
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
||||||
Foreign currency translation
|
|
(2
|
)
|
|
(17
|
)
|
|
35
|
|
|||
Change in fair value of derivative financial instruments, net of tax (tax benefit) of $5, $(4), and $(9)
|
|
13
|
|
|
54
|
|
|
(51
|
)
|
|||
Reclassification adjustments on derivative financial instruments, net of (tax) tax benefit of $(5), $6, and $3
|
|
(24
|
)
|
|
(20
|
)
|
|
(2
|
)
|
|||
Other comprehensive income (loss), net of tax
|
|
(13
|
)
|
|
17
|
|
|
(18
|
)
|
|||
Comprehensive income
|
|
$
|
338
|
|
|
$
|
1,020
|
|
|
$
|
830
|
|
|
|
Common Stock
|
|
Additional
Paid-in Capital |
|
Retained
Earnings |
|
Accumulated
Other Comprehensive Income |
|
|
|||||||||||||
($ and shares in millions except per share amounts)
|
|
Shares
|
|
Amount
|
|
Total
|
|||||||||||||||||
Balance as of January 28, 2017
|
|
399
|
|
|
$
|
20
|
|
|
$
|
81
|
|
|
$
|
2,749
|
|
|
$
|
54
|
|
|
$
|
2,904
|
|
Cumulative effect of a change in accounting principle related to share-based compensation
|
|
|
|
|
|
(5
|
)
|
|
3
|
|
|
|
|
(2
|
)
|
||||||||
Net income
|
|
|
|
|
|
|
|
848
|
|
|
|
|
848
|
|
|||||||||
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
|
(18
|
)
|
|
(18
|
)
|
|||||||||
Repurchases and retirement of common stock
|
|
(13
|
)
|
|
(1
|
)
|
|
(156
|
)
|
|
(158
|
)
|
|
|
|
(315
|
)
|
||||||
Issuance of common stock related to stock options and employee stock purchase plans
|
|
2
|
|
|
—
|
|
|
30
|
|
|
|
|
|
|
30
|
|
|||||||
Issuance of common stock and withholding tax payments related to vesting of stock units
|
|
1
|
|
|
—
|
|
|
(18
|
)
|
|
|
|
|
|
(18
|
)
|
|||||||
Share-based compensation, net of forfeitures
|
|
|
|
|
|
76
|
|
|
|
|
|
|
76
|
|
|||||||||
Common stock dividends ($0.92 per share)
|
|
|
|
|
|
|
|
|
(361
|
)
|
|
|
|
(361
|
)
|
||||||||
Balance as of February 3, 2018
|
|
389
|
|
|
19
|
|
|
8
|
|
|
3,081
|
|
|
36
|
|
|
3,144
|
|
|||||
Cumulative effect of a change in accounting principle related to revenue recognition
|
|
|
|
|
|
|
|
36
|
|
|
|
|
36
|
|
|||||||||
Net income
|
|
|
|
|
|
|
|
1,003
|
|
|
|
|
1,003
|
|
|||||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
17
|
|
|
17
|
|
|||||||||
Repurchases and retirement of common stock
|
|
(14
|
)
|
|
—
|
|
|
(132
|
)
|
|
(266
|
)
|
|
|
|
(398
|
)
|
||||||
Issuance of common stock related to stock options and employee stock purchase plans
|
|
2
|
|
|
—
|
|
|
46
|
|
|
|
|
|
|
46
|
|
|||||||
Issuance of common stock and withholding tax payments related to vesting of stock units
|
|
1
|
|
|
—
|
|
|
(23
|
)
|
|
|
|
|
|
(23
|
)
|
|||||||
Share-based compensation, net of forfeitures
|
|
|
|
|
|
101
|
|
|
|
|
|
|
101
|
|
|||||||||
Common stock dividends ($0.97 per share)
|
|
|
|
|
|
|
|
(373
|
)
|
|
|
|
(373
|
)
|
|||||||||
Balance as of February 2, 2019
|
|
378
|
|
|
19
|
|
|
—
|
|
|
3,481
|
|
|
53
|
|
|
3,553
|
|
|||||
Cumulative effect of a change in accounting principle related to leases
|
|
|
|
|
|
|
|
|
|
(86
|
)
|
|
|
|
|
(86
|
)
|
||||||
Net income
|
|
|
|
|
|
|
|
351
|
|
|
|
|
351
|
|
|||||||||
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
|
(13
|
)
|
|
(13
|
)
|
|||||||||
Repurchases and retirement of common stock
|
|
(10
|
)
|
|
—
|
|
|
(75
|
)
|
|
(125
|
)
|
|
|
|
(200
|
)
|
||||||
Issuance of common stock related to stock options and employee stock purchase plans
|
|
1
|
|
|
—
|
|
|
25
|
|
|
|
|
|
|
25
|
|
|||||||
Issuance of common stock and withholding tax payments related to vesting of stock units
|
|
2
|
|
|
—
|
|
|
(21
|
)
|
|
|
|
|
|
(21
|
)
|
|||||||
Share-based compensation, net of forfeitures
|
|
|
|
|
|
71
|
|
|
|
|
|
|
71
|
|
|||||||||
Common stock dividends ($0.97 per share)
|
|
|
|
|
|
|
|
(364
|
)
|
|
|
|
(364
|
)
|
|||||||||
Balance as of February 1, 2020
|
|
371
|
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
3,257
|
|
|
$
|
40
|
|
|
$
|
3,316
|
|
|
Fiscal Year
|
||||||||||
($ in millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
351
|
|
|
$
|
1,003
|
|
|
$
|
848
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
557
|
|
|
578
|
|
|
559
|
|
|||
Amortization of lease incentives
|
—
|
|
|
(61
|
)
|
|
(60
|
)
|
|||
Share-based compensation
|
68
|
|
|
91
|
|
|
87
|
|
|||
Impairment of operating lease assets
|
239
|
|
|
—
|
|
|
—
|
|
|||
Impairment of store assets
|
98
|
|
|
14
|
|
|
28
|
|
|||
Loss on disposal of property and equipment
|
70
|
|
|
4
|
|
|
11
|
|
|||
Non-cash and other items
|
(10
|
)
|
|
(10
|
)
|
|
8
|
|
|||
Gain on sale of building
|
(191
|
)
|
|
—
|
|
|
—
|
|
|||
Deferred income taxes
|
(81
|
)
|
|
65
|
|
|
61
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Merchandise inventory
|
4
|
|
|
(154
|
)
|
|
(142
|
)
|
|||
Other current assets and other long-term assets
|
105
|
|
|
(18
|
)
|
|
33
|
|
|||
Accounts payable
|
66
|
|
|
(78
|
)
|
|
(90
|
)
|
|||
Accrued expenses and other current liabilities
|
110
|
|
|
(196
|
)
|
|
34
|
|
|||
Income taxes payable, net of prepaid and other tax-related items
|
86
|
|
|
113
|
|
|
(52
|
)
|
|||
Lease incentives and other long-term liabilities
|
—
|
|
|
30
|
|
|
55
|
|
|||
Operating lease assets and liabilities, net
|
(61
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash provided by operating activities
|
1,411
|
|
|
1,381
|
|
|
1,380
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Purchases of property and equipment
|
(702
|
)
|
|
(705
|
)
|
|
(731
|
)
|
|||
Purchase of building
|
(343
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from sale of building
|
220
|
|
|
—
|
|
|
—
|
|
|||
Purchases of short-term investments
|
(293
|
)
|
|
(464
|
)
|
|
—
|
|
|||
Proceeds from sales and maturities of short-term investments
|
293
|
|
|
177
|
|
|
—
|
|
|||
Purchase of Janie and Jack
|
(69
|
)
|
|
—
|
|
|
—
|
|
|||
Insurance proceeds related to loss on property and equipment
|
—
|
|
|
—
|
|
|
66
|
|
|||
Other
|
—
|
|
|
(9
|
)
|
|
(1
|
)
|
|||
Net cash used for investing activities
|
(894
|
)
|
|
(1,001
|
)
|
|
(666
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Payments of debt
|
—
|
|
|
—
|
|
|
(67
|
)
|
|||
Proceeds from issuances under share-based compensation plans
|
25
|
|
|
46
|
|
|
30
|
|
|||
Withholding tax payments related to vesting of stock units
|
(21
|
)
|
|
(23
|
)
|
|
(18
|
)
|
|||
Repurchases of common stock
|
(200
|
)
|
|
(398
|
)
|
|
(315
|
)
|
|||
Cash dividends paid
|
(364
|
)
|
|
(373
|
)
|
|
(361
|
)
|
|||
Other
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||
Net cash used for financing activities
|
(560
|
)
|
|
(749
|
)
|
|
(731
|
)
|
|||
Effect of foreign exchange rate fluctuations on cash, cash equivalents, and restricted cash
|
4
|
|
|
(10
|
)
|
|
19
|
|
|||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
(39
|
)
|
|
(379
|
)
|
|
2
|
|
|||
Cash, cash equivalents, and restricted cash at beginning of period
|
1,420
|
|
|
1,799
|
|
|
1,797
|
|
|||
Cash, cash equivalents, and restricted cash at end of period
|
$
|
1,381
|
|
|
$
|
1,420
|
|
|
$
|
1,799
|
|
Non-cash investing activities:
|
|
|
|
|
|
||||||
Purchases of property and equipment not yet paid at end of period
|
$
|
85
|
|
|
$
|
93
|
|
|
$
|
77
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Cash paid for interest during the period
|
$
|
76
|
|
|
$
|
76
|
|
|
$
|
76
|
|
Cash paid for income taxes during the period, net of refunds
|
$
|
176
|
|
|
$
|
143
|
|
|
$
|
570
|
|
Cash paid for operating lease liabilities
|
$
|
1,244
|
|
|
$
|
—
|
|
|
$
|
—
|
|
($ in millions)
|
February 1,
2020 |
|
February 2,
2019 |
|
February 3,
2018 |
||||||
Cash and cash equivalents
|
$
|
1,364
|
|
|
$
|
1,081
|
|
|
$
|
1,783
|
|
Restricted cash included in other current assets
|
—
|
|
|
1
|
|
|
1
|
|
|||
Restricted cash included in other long-term assets (1)
|
17
|
|
|
338
|
|
|
15
|
|
|||
Total cash, cash equivalents, and restricted cash shown on the Consolidated Statement of Cash Flows
|
$
|
1,381
|
|
|
$
|
1,420
|
|
|
$
|
1,799
|
|
(1)
|
Fiscal 2018 included $320 million of consideration held by a third party in connection with the purchase of a building that was completed in fiscal 2019.
|
Category
|
|
Term
|
Leasehold improvements
|
|
Shorter of remaining lease term or economic life, up to 15 years
|
Furniture and equipment
|
|
Up to 10 years
|
Software
|
|
3 to 7 years
|
Buildings and building improvements
|
|
Up to 39 years
|
•
|
the cost of merchandise;
|
•
|
inventory shortage and valuation adjustments;
|
•
|
freight charges;
|
•
|
online shipping and packaging costs;
|
•
|
cost associated with our sourcing operations, including payroll, benefits, and other administrative expenses;
|
•
|
lease and other occupancy related cost, depreciation, and amortization related to our store operations, distribution centers, information technology, and certain corporate functions; and
|
•
|
gains and losses associated with foreign currency derivative contracts used to hedge forecasted merchandise purchases and related costs denominated in U.S. dollars made by our international subsidiaries whose functional currencies are their local currencies.
|
•
|
payroll, benefits, and other administrative expenses for our store operations, field management, and distribution centers;
|
•
|
payroll, benefits, and other administrative expenses for our corporate functions, including product design and development;
|
•
|
marketing;
|
•
|
information technology expenses and maintenance costs;
|
•
|
lease and other occupancy related cost, depreciation, and amortization for our corporate facilities;
|
•
|
research and development expenses;
|
•
|
gains and losses associated with foreign currency derivative contracts not designated as hedging instruments;
|
•
|
third party credit card processing fees; and
|
•
|
other expenses (income).
|
|
|
Fiscal Year
|
||||||||||
($ in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Foreign currency transaction gain (loss)
|
|
$
|
1
|
|
|
$
|
(32
|
)
|
|
$
|
31
|
|
Realized and unrealized gain (loss) from certain derivative financial instruments
|
|
4
|
|
|
34
|
|
|
(30
|
)
|
|||
Net foreign exchange gain
|
|
$
|
5
|
|
|
$
|
2
|
|
|
$
|
1
|
|
($ in millions)
|
|
February 1,
2020 |
|
February 2,
2019 |
||||
Cash (1)
|
|
$
|
1,053
|
|
|
$
|
708
|
|
Bank certificates of deposit and time deposits
|
|
286
|
|
|
341
|
|
||
Money market funds
|
|
19
|
|
|
26
|
|
||
Domestic commercial paper and other
|
|
6
|
|
|
6
|
|
||
Cash and cash equivalents
|
|
$
|
1,364
|
|
|
$
|
1,081
|
|
(1)
|
Cash includes $61 million and $68 million of amounts in transit from banks for customer credit card and debit card transactions as of February 1, 2020 and February 2, 2019, respectively.
|
($ in millions)
|
|
February 1,
2020 |
|
February 2,
2019 |
||||
U.S. agency securities
|
|
$
|
25
|
|
|
$
|
22
|
|
Corporate securities
|
|
148
|
|
|
141
|
|
||
U.S. treasury securities
|
|
117
|
|
|
125
|
|
||
Short-term investments
|
|
$
|
290
|
|
|
$
|
288
|
|
($ in millions)
|
|
February 1,
2020 |
|
February 2,
2019 |
||||
Accounts receivable
|
|
$
|
316
|
|
|
$
|
321
|
|
Prepaid income taxes
|
|
77
|
|
|
102
|
|
||
Prepaid minimum rent and occupancy expenses
|
|
148
|
|
|
157
|
|
||
Right of return asset
|
|
36
|
|
|
38
|
|
||
Derivative financial instruments
|
|
10
|
|
|
20
|
|
||
Other
|
|
119
|
|
|
113
|
|
||
Other current assets
|
|
$
|
706
|
|
|
$
|
751
|
|
($ in millions)
|
|
February 1,
2020 |
|
February 2,
2019 |
||||
Leasehold improvements
|
|
$
|
2,923
|
|
|
$
|
3,104
|
|
Furniture and equipment
|
|
2,802
|
|
|
2,732
|
|
||
Software
|
|
1,626
|
|
|
1,525
|
|
||
Land, buildings, and building improvements
|
|
1,408
|
|
|
1,123
|
|
||
Construction-in-progress
|
|
202
|
|
|
183
|
|
||
Property and equipment, at cost
|
|
8,961
|
|
|
8,667
|
|
||
Less: Accumulated depreciation
|
|
(5,839
|
)
|
|
(5,755
|
)
|
||
Property and equipment, net of accumulated depreciation
|
|
$
|
3,122
|
|
|
$
|
2,912
|
|
($ in millions)
|
|
February 1,
2020 |
|
February 2,
2019 |
||||
Long-term income tax-related assets
|
|
$
|
256
|
|
|
$
|
151
|
|
Goodwill
|
|
109
|
|
|
109
|
|
||
Trade names
|
|
121
|
|
|
92
|
|
||
Restricted cash (1)
|
|
17
|
|
|
338
|
|
||
Other
|
|
136
|
|
|
196
|
|
||
Other long-term assets
|
|
$
|
639
|
|
|
$
|
886
|
|
(1)
|
Fiscal 2018 included $320 million of consideration held by a third party in connection with the purchase of a building completed in fiscal 2019.
|
($ in millions)
|
|
February 1,
2020 |
|
February 2,
2019 |
||||
Accrued compensation and benefits
|
|
$
|
291
|
|
|
$
|
254
|
|
Deferred revenue
|
|
226
|
|
|
227
|
|
||
Short-term deferred rent and tenant allowances (1)
|
|
—
|
|
|
101
|
|
||
Sales return allowance
|
|
74
|
|
|
78
|
|
||
Accrued advertising
|
|
57
|
|
|
41
|
|
||
Derivative financial instruments
|
|
10
|
|
|
11
|
|
||
Other
|
|
409
|
|
|
312
|
|
||
Accrued expenses and other current liabilities
|
|
$
|
1,067
|
|
|
$
|
1,024
|
|
(1)
|
Beginning in fiscal 2019, short-term deferred rent and tenant allowances no longer reflects lease incentives due to the adoption of the new lease accounting standard. Prior period amounts have not been restated and continue to be reported under accounting standards in effect for those periods.
|
($ in millions)
|
|
February 1,
2020 |
|
February 2,
2019 |
||||
Long-term deferred rent and tenant allowances (1)
|
|
$
|
50
|
|
|
$
|
736
|
|
Long-term income tax-related liabilities
|
|
152
|
|
|
118
|
|
||
Long-term asset retirement obligations
|
|
56
|
|
|
52
|
|
||
Other
|
|
139
|
|
|
167
|
|
||
Lease incentives and other long-term liabilities
|
|
$
|
397
|
|
|
$
|
1,073
|
|
(1)
|
Beginning in fiscal 2019, long-term deferred rent and tenant allowances no longer reflects lease incentives due to the adoption of the new lease accounting standard. Prior period amounts have not been restated and continue to be reported under accounting standards in effect for those periods.
|
($ in millions)
|
|
February 1,
2020 |
|
February 2,
2019 |
||||
Goodwill (1)
|
|
$
|
109
|
|
|
$
|
109
|
|
Trade names (2)
|
|
$
|
121
|
|
|
$
|
92
|
|
(1)
|
Includes $99 million and $10 million related to Athleta and Intermix, respectively.
|
(2)
|
Includes $54 million, $38 million, and $29 million related to Athleta, Intermix, and Janie and Jack, respectively.
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
($ in millions)
|
|
February 1, 2020
|
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
|
$
|
311
|
|
|
$
|
19
|
|
|
$
|
292
|
|
|
$
|
—
|
|
Short-term investments
|
|
290
|
|
|
117
|
|
|
173
|
|
|
—
|
|
||||
Derivative financial instruments
|
|
10
|
|
|
—
|
|
|
10
|
|
|
—
|
|
||||
Deferred compensation plan assets
|
|
51
|
|
|
51
|
|
|
—
|
|
|
—
|
|
||||
Other assets
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Total
|
|
$
|
664
|
|
|
$
|
187
|
|
|
$
|
475
|
|
|
$
|
2
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
($ in millions)
|
|
February 2, 2019
|
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
|
$
|
373
|
|
|
$
|
26
|
|
|
$
|
347
|
|
|
$
|
—
|
|
Short-term investments
|
|
288
|
|
|
125
|
|
|
163
|
|
|
—
|
|
||||
Derivative financial instruments
|
|
20
|
|
|
—
|
|
|
20
|
|
|
—
|
|
||||
Deferred compensation plan assets
|
|
48
|
|
|
48
|
|
|
—
|
|
|
—
|
|
||||
Other assets
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Total
|
|
$
|
731
|
|
|
$
|
199
|
|
|
$
|
530
|
|
|
$
|
2
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
Fiscal Year
|
||||||||||
($ in millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Operating lease assets:
|
|
|
|
|
|
||||||
Flagship stores
|
$
|
223
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Specialty fleet restructuring
|
2
|
|
|
—
|
|
|
—
|
|
|||
Other
|
14
|
|
|
—
|
|
|
—
|
|
|||
Total impairment charges of operating lease assets (1)
|
$
|
239
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Store assets:
|
|
|
|
|
|
||||||
Flagship stores
|
$
|
73
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Specialty fleet restructuring
|
11
|
|
|
—
|
|
|
—
|
|
|||
Other
|
14
|
|
|
14
|
|
|
28
|
|
|||
Total impairment charges of store assets (2)
|
$
|
98
|
|
|
$
|
14
|
|
|
$
|
28
|
|
Other indefinite-lived intangible assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Goodwill
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total impairment charges of long-lived assets
|
$
|
337
|
|
|
$
|
14
|
|
|
$
|
28
|
|
(1)
|
The impairment charge of operating lease assets reduced the then carrying amount of the applicable operating lease assets of $865 million to their fair value of $626 million during fiscal 2019.
|
(2)
|
The impairment charge reduced the then carrying amount of the applicable store assets of $99 million, $15 million, and $30 million to their fair value of $1 million, $1 million, and $2 million during fiscal 2019, 2018, and 2017, respectively.
|
($ in millions)
|
February 1,
2020 |
|
February 2,
2019 |
||||
Derivatives designated as cash flow hedges
|
$
|
501
|
|
|
$
|
774
|
|
Derivatives not designated as hedging instruments
|
689
|
|
|
660
|
|
||
Total
|
$
|
1,190
|
|
|
$
|
1,434
|
|
($ in millions)
|
February 1,
2020 |
|
February 2,
2019 |
||||
Derivatives designated as cash flow hedges:
|
|
|
|
||||
Other current assets
|
$
|
6
|
|
|
$
|
15
|
|
Accrued expenses and other current liabilities
|
2
|
|
|
3
|
|
||
|
|
|
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
||||
Other current assets
|
4
|
|
|
5
|
|
||
Accrued expenses and other current liabilities
|
8
|
|
|
8
|
|
||
|
|
|
|
||||
Total derivatives in an asset position
|
$
|
10
|
|
|
$
|
20
|
|
Total derivatives in a liability position
|
$
|
10
|
|
|
$
|
11
|
|
|
Fiscal Year
|
||||||||||
($ in millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Derivatives in cash flow hedging relationships:
|
|
|
|
|
|
||||||
Gain (loss) recognized in other comprehensive income
|
$
|
18
|
|
|
$
|
50
|
|
|
$
|
(60
|
)
|
Derivatives in net investment hedging relationships:
|
|
|
|
|
|
||||||
Loss recognized in other comprehensive income
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
Location and Amount of (Gain) Loss Recognized in Income
|
||||||||||||||||||||||
|
Fiscal Year 2019
|
|
Fiscal Year 2018
|
|
Fiscal Year 2017
|
||||||||||||||||||
($ in millions)
|
Cost of goods sold and occupancy expenses
|
|
Operating expenses
|
|
Cost of goods sold and occupancy expenses
|
|
Operating expenses
|
|
Cost of goods sold and occupancy expenses
|
|
Operating expenses
|
||||||||||||
Total amount of expense line items presented on the Consolidated Statements of Income in which the effects of derivatives are recorded
|
$
|
10,250
|
|
|
$
|
5,559
|
|
|
$
|
10,258
|
|
|
$
|
4,960
|
|
|
$
|
9,789
|
|
|
$
|
4,587
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(Gain) loss recognized in income:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives designated as cash flow hedges
|
$
|
(29
|
)
|
|
$
|
—
|
|
|
$
|
(13
|
)
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
1
|
|
Derivatives not designated as hedging instruments
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(33
|
)
|
|
—
|
|
|
29
|
|
||||||
Total (gain) loss recognized in income
|
$
|
(29
|
)
|
|
$
|
(4
|
)
|
|
$
|
(13
|
)
|
|
$
|
(34
|
)
|
|
$
|
—
|
|
|
$
|
30
|
|
|
|
Fiscal Year
|
||||||||||
($ and shares in millions except average per share cost)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Number of shares repurchased (1)
|
|
10
|
|
|
14
|
|
|
13
|
|
|||
Total cost
|
|
$
|
200
|
|
|
$
|
398
|
|
|
$
|
315
|
|
Average per share cost including commissions
|
|
$
|
19.18
|
|
|
$
|
28.93
|
|
|
$
|
24.43
|
|
(1)
|
Excludes shares withheld to settle employee statutory tax withholding related to the vesting of stock units.
|
($ in millions)
|
Foreign Currency Translation
|
|
Cash Flow Hedges
|
|
Total
|
||||||
Balance at February 2, 2019
|
$
|
47
|
|
|
$
|
6
|
|
|
$
|
53
|
|
Foreign currency translation
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||
Change in fair value of derivative financial instruments
|
—
|
|
|
13
|
|
|
13
|
|
|||
Amounts reclassified from accumulated OCI
|
—
|
|
|
(24
|
)
|
|
(24
|
)
|
|||
Other comprehensive loss, net
|
(2
|
)
|
|
(11
|
)
|
|
(13
|
)
|
|||
Balance at February 1, 2020
|
$
|
45
|
|
|
$
|
(5
|
)
|
|
$
|
40
|
|
|
|
|
|
|
|
||||||
($ in millions)
|
Foreign Currency Translation
|
|
Cash Flow Hedges
|
|
Total
|
||||||
Balance at February 3, 2018
|
$
|
64
|
|
|
$
|
(28
|
)
|
|
$
|
36
|
|
Foreign currency translation
|
(20
|
)
|
|
—
|
|
|
(20
|
)
|
|||
Change in fair value of derivative financial instruments
|
—
|
|
|
54
|
|
|
54
|
|
|||
Amounts reclassified from accumulated OCI
|
3
|
|
|
(20
|
)
|
|
(17
|
)
|
|||
Other comprehensive income (loss), net
|
(17
|
)
|
|
34
|
|
|
17
|
|
|||
Balance at February 2, 2019
|
$
|
47
|
|
|
$
|
6
|
|
|
$
|
53
|
|
|
|
|
|
|
|
||||||
($ in millions)
|
Foreign Currency Translation
|
|
Cash Flow Hedges
|
|
Total
|
||||||
Balance at January 28, 2017
|
$
|
29
|
|
|
$
|
25
|
|
|
$
|
54
|
|
Foreign currency translation
|
35
|
|
|
—
|
|
|
35
|
|
|||
Change in fair value of derivative financial instruments
|
—
|
|
|
(51
|
)
|
|
(51
|
)
|
|||
Amounts reclassified from accumulated OCI
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|||
Other comprehensive income (loss), net
|
35
|
|
|
(53
|
)
|
|
(18
|
)
|
|||
Balance at February 3, 2018
|
$
|
64
|
|
|
$
|
(28
|
)
|
|
$
|
36
|
|
|
|
Fiscal Year
|
||||||||||
($ in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Stock units
|
|
$
|
52
|
|
|
$
|
71
|
|
|
$
|
69
|
|
Stock options
|
|
12
|
|
|
16
|
|
|
14
|
|
|||
Employee stock purchase plan
|
|
4
|
|
|
4
|
|
|
4
|
|
|||
Share-based compensation expense
|
|
68
|
|
|
91
|
|
|
87
|
|
|||
Less: Income tax benefit
|
|
(23
|
)
|
|
(22
|
)
|
|
(35
|
)
|
|||
Share-based compensation expense, net of tax
|
|
$
|
45
|
|
|
$
|
69
|
|
|
$
|
52
|
|
|
|
Shares
|
|
Weighted-Average
Grant-Date
Fair Value Per Share
|
|||
Balance as of February 2, 2019
|
|
8,085,259
|
|
|
$
|
29.97
|
|
Granted
|
|
5,295,007
|
|
|
$
|
21.93
|
|
Vested
|
|
(2,527,515
|
)
|
|
$
|
26.25
|
|
Forfeited
|
|
(3,890,342
|
)
|
|
$
|
25.30
|
|
Balance as of February 1, 2020
|
|
6,962,409
|
|
|
$
|
24.33
|
|
|
|
Fiscal Year
|
||||||||||
($ in millions except per share amounts)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Weighted-average fair value per share of Stock Units granted
|
|
$
|
21.93
|
|
|
$
|
29.33
|
|
|
$
|
21.81
|
|
Fair value of Stock Units vested
|
|
$
|
66
|
|
|
$
|
58
|
|
|
$
|
64
|
|
|
|
Fiscal Year
|
|||||||
|
|
2019
|
|
2018
|
|
2017
|
|||
Expected term (in years)
|
|
4.2
|
|
|
3.9
|
|
|
3.9
|
|
Expected volatility
|
|
37.5
|
%
|
|
36.3
|
%
|
|
38.2
|
%
|
Dividend yield
|
|
4.1
|
%
|
|
3.1
|
%
|
|
3.8
|
%
|
Risk-free interest rate
|
|
2.2
|
%
|
|
2.5
|
%
|
|
1.7
|
%
|
|
|
Shares
|
|
Weighted-
Average
Exercise Price Per Share
|
|||
Balance as of February 2, 2019
|
|
10,685,422
|
|
|
$
|
29.80
|
|
Granted
|
|
3,811,644
|
|
|
$
|
24.09
|
|
Exercised
|
|
(159,750
|
)
|
|
$
|
23.33
|
|
Forfeited/Expired
|
|
(2,901,294
|
)
|
|
$
|
28.72
|
|
Balance as of February 1, 2020
|
|
11,436,022
|
|
|
$
|
28.26
|
|
|
|
Fiscal Year
|
||||||||||
($ in millions except per share amounts)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Weighted-average fair value per share of stock options granted
|
|
$
|
5.43
|
|
|
$
|
7.75
|
|
|
$
|
5.47
|
|
Aggregate intrinsic value of stock options exercised
|
|
$
|
1
|
|
|
$
|
5
|
|
|
$
|
1
|
|
Fair value of stock options vested
|
|
$
|
16
|
|
|
$
|
14
|
|
|
$
|
12
|
|
|
|
Intrinsic Value as of
February 1, 2020
(in millions)
|
|
Number of
Shares as of
February 1, 2020
|
|
Weighted-
Average
Remaining
Contractual
Life (in years)
|
|
Weighted-
Average
Exercise Price Per Share
|
|||||
Options Outstanding
|
|
$
|
—
|
|
|
11,436,022
|
|
|
6.0
|
|
$
|
28.26
|
|
Options Exercisable
|
|
$
|
—
|
|
|
5,905,582
|
|
|
3.7
|
|
$
|
30.12
|
|
|
Fiscal Year
|
||
($ in millions)
|
2019
|
||
Operating lease cost
|
$
|
1,233
|
|
Variable lease cost
|
621
|
|
|
Sublease income
|
(9
|
)
|
|
Net lease cost
|
$
|
1,845
|
|
($ in millions)
|
|
|
||
Fiscal Year
|
|
|
||
2019
|
|
$
|
1,156
|
|
2020
|
|
1,098
|
|
|
2021
|
|
892
|
|
|
2022
|
|
730
|
|
|
2023
|
|
539
|
|
|
Thereafter
|
|
1,520
|
|
|
Total minimum lease commitments
|
|
$
|
5,935
|
|
|
|
Fiscal Year
|
||||||||||
($ in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
United States
|
|
$
|
550
|
|
|
$
|
1,183
|
|
|
$
|
1,301
|
|
Foreign
|
|
(22
|
)
|
|
139
|
|
|
123
|
|
|||
Income before income taxes
|
|
$
|
528
|
|
|
$
|
1,322
|
|
|
$
|
1,424
|
|
|
|
Fiscal Year
|
||||||||||
($ in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
177
|
|
|
$
|
164
|
|
|
$
|
415
|
|
State
|
|
37
|
|
|
41
|
|
|
51
|
|
|||
Foreign
|
|
44
|
|
|
49
|
|
|
49
|
|
|||
Total current
|
|
258
|
|
|
254
|
|
|
515
|
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Federal
|
|
(58
|
)
|
|
55
|
|
|
55
|
|
|||
State
|
|
(20
|
)
|
|
11
|
|
|
(5
|
)
|
|||
Foreign
|
|
(3
|
)
|
|
(1
|
)
|
|
11
|
|
|||
Total deferred
|
|
(81
|
)
|
|
65
|
|
|
61
|
|
|||
Total provision
|
|
$
|
177
|
|
|
$
|
319
|
|
|
$
|
576
|
|
|
|
Fiscal Year
|
|||||||
|
|
2019
|
|
2018
|
|
2017
|
|||
Federal statutory tax rate
|
|
21.0
|
%
|
|
21.0
|
%
|
|
33.7
|
%
|
State and local income taxes, net of federal benefit
|
|
3.2
|
|
|
4.0
|
|
|
4.0
|
|
Tax impact of foreign operations
|
|
6.0
|
|
|
0.1
|
|
|
(1.1
|
)
|
Impact of TCJA of 2017
|
|
5.6
|
|
|
(3.2
|
)
|
|
4.0
|
|
Excess foreign tax credits
|
|
—
|
|
|
0.5
|
|
|
(0.7
|
)
|
Other
|
|
(2.3
|
)
|
|
1.7
|
|
|
0.5
|
|
Effective tax rate
|
|
33.5
|
%
|
|
24.1
|
%
|
|
40.4
|
%
|
($ in millions)
|
|
February 1, 2020
|
|
February 2,
2019 |
||||
Gross deferred tax assets:
|
|
|
|
|
||||
Deferred rent
|
|
$
|
—
|
|
|
$
|
124
|
|
Operating lease liabilities
|
|
1,726
|
|
|
—
|
|
||
Accrued payroll and related benefits
|
|
59
|
|
|
51
|
|
||
Accruals
|
|
132
|
|
|
106
|
|
||
Inventory capitalization and other adjustments
|
|
38
|
|
|
42
|
|
||
Deferred income
|
|
34
|
|
|
29
|
|
||
Federal, state, and foreign net operating losses
|
|
101
|
|
|
70
|
|
||
Other
|
|
37
|
|
|
40
|
|
||
Total gross deferred tax assets
|
|
2,127
|
|
|
462
|
|
||
Valuation allowance
|
|
(199
|
)
|
|
(156
|
)
|
||
Total deferred tax assets, net of valuation allowance
|
|
1,928
|
|
|
306
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
(246
|
)
|
|
(180
|
)
|
||
Operating lease assets
|
|
(1,448
|
)
|
|
—
|
|
||
Unremitted earnings of certain foreign subsidiaries
|
|
(2
|
)
|
|
(2
|
)
|
||
Unrealized net gain on cash flow hedges
|
|
(2
|
)
|
|
(3
|
)
|
||
Other
|
|
(9
|
)
|
|
(6
|
)
|
||
Total deferred tax liabilities
|
|
(1,707
|
)
|
|
(191
|
)
|
||
Net deferred tax assets
|
|
$
|
221
|
|
|
$
|
115
|
|
|
|
Fiscal Year
|
||||||||||
($ in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Balance at beginning of fiscal year
|
|
$
|
136
|
|
|
$
|
118
|
|
|
$
|
44
|
|
Increases related to current year tax positions
|
|
12
|
|
|
11
|
|
|
48
|
|
|||
Prior year tax positions:
|
|
|
|
|
|
|
||||||
Increases
|
|
11
|
|
|
29
|
|
|
28
|
|
|||
Decreases
|
|
(4
|
)
|
|
(6
|
)
|
|
(2
|
)
|
|||
Lapse of Statute of Limitations
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Cash settlements
|
|
(1
|
)
|
|
(15
|
)
|
|
—
|
|
|||
Foreign currency translation
|
|
(1
|
)
|
|
(1
|
)
|
|
1
|
|
|||
Balance at end of fiscal year
|
|
$
|
152
|
|
|
$
|
136
|
|
|
$
|
118
|
|
|
|
Fiscal Year
|
|||||||
(shares in millions)
|
|
2019
|
|
2018
|
|
2017
|
|||
Weighted-average number of shares—basic
|
|
376
|
|
|
385
|
|
|
393
|
|
Common stock equivalents
|
|
2
|
|
|
3
|
|
|
3
|
|
Weighted-average number of shares—diluted
|
|
378
|
|
|
388
|
|
|
396
|
|
($ in millions)
|
|
Old Navy Global
|
|
Gap Global
|
|
Banana
Republic Global (2) |
|
Other (3)
|
|
Total
|
|
Percentage
of Net Sales |
|||||||||||
Fiscal 2019 (4)
|
|
|
|
|
|
|
|||||||||||||||||
U.S. (1)
|
|
$
|
7,259
|
|
|
$
|
2,723
|
|
|
$
|
2,191
|
|
|
$
|
1,225
|
|
|
$
|
13,398
|
|
|
82
|
%
|
Canada
|
|
587
|
|
|
349
|
|
|
215
|
|
|
2
|
|
|
1,153
|
|
|
7
|
|
|||||
Europe
|
|
—
|
|
|
525
|
|
|
14
|
|
|
—
|
|
|
539
|
|
|
3
|
|
|||||
Asia
|
|
45
|
|
|
943
|
|
|
96
|
|
|
—
|
|
|
1,084
|
|
|
7
|
|
|||||
Other regions
|
|
92
|
|
|
94
|
|
|
23
|
|
|
—
|
|
|
209
|
|
|
1
|
|
|||||
Total
|
|
$
|
7,983
|
|
|
$
|
4,634
|
|
|
$
|
2,539
|
|
|
$
|
1,227
|
|
|
$
|
16,383
|
|
|
100
|
%
|
($ in millions)
|
|
Old Navy Global
|
|
Gap Global
|
|
Banana
Republic Global |
|
Other (3)
|
|
Total
|
|
Percentage
of Net Sales |
|||||||||||
Fiscal 2018 (4)
|
|
|
|
|
|
|
|||||||||||||||||
U.S. (1)
|
|
$
|
7,134
|
|
|
$
|
2,990
|
|
|
$
|
2,095
|
|
|
$
|
1,121
|
|
|
$
|
13,340
|
|
|
81
|
%
|
Canada
|
|
584
|
|
|
379
|
|
|
227
|
|
|
3
|
|
|
1,193
|
|
|
7
|
|
|||||
Europe
|
|
—
|
|
|
589
|
|
|
14
|
|
|
—
|
|
|
603
|
|
|
4
|
|
|||||
Asia
|
|
50
|
|
|
1,089
|
|
|
94
|
|
|
—
|
|
|
1,233
|
|
|
7
|
|
|||||
Other regions
|
|
72
|
|
|
113
|
|
|
26
|
|
|
—
|
|
|
211
|
|
|
1
|
|
|||||
Total
|
|
$
|
7,840
|
|
|
$
|
5,160
|
|
|
$
|
2,456
|
|
|
$
|
1,124
|
|
|
$
|
16,580
|
|
|
100
|
%
|
($ in millions)
|
|
Old Navy Global
|
|
Gap Global
|
|
Banana
Republic Global |
|
Other (3)
|
|
Total
|
|
Percentage
of Net Sales |
|||||||||||
Fiscal 2017 (5)
|
|
|
|
|
|
|
|||||||||||||||||
U.S. (1)
|
|
$
|
6,570
|
|
|
$
|
3,065
|
|
|
$
|
2,017
|
|
|
$
|
916
|
|
|
$
|
12,568
|
|
|
80
|
%
|
Canada
|
|
547
|
|
|
398
|
|
|
225
|
|
|
3
|
|
|
1,173
|
|
|
7
|
|
|||||
Europe
|
|
—
|
|
|
626
|
|
|
15
|
|
|
—
|
|
|
641
|
|
|
4
|
|
|||||
Asia
|
|
50
|
|
|
1,117
|
|
|
96
|
|
|
—
|
|
|
1,263
|
|
|
8
|
|
|||||
Other regions
|
|
71
|
|
|
112
|
|
|
27
|
|
|
—
|
|
|
210
|
|
|
1
|
|
|||||
Total
|
|
$
|
7,238
|
|
|
$
|
5,318
|
|
|
$
|
2,380
|
|
|
$
|
919
|
|
|
$
|
15,855
|
|
|
100
|
%
|
(1)
|
U.S. includes the United States, Puerto Rico, and Guam.
|
(2)
|
Beginning on March 4, 2019, Banana Republic Global includes net sales for the Janie and Jack brand.
|
(3)
|
Primarily consists of net sales for the Athleta and Intermix brands as well as a portion of income related to our credit card agreement. Beginning in the third quarter of fiscal 2018, the Hill City brand is also included. Net sales for Athleta for fiscal 2019, 2018, and 2017 were $978 million, $881 million, and $737 million, respectively.
|
(4)
|
Net sales reflect the adoption of the new revenue recognition standard in fiscal 2018. Prior period amounts have not been restated and continue to be reported under accounting standards in effect for those periods.
|
(5)
|
Net sales reflect the favorable impact of the calendar shift due to the 53rd week in fiscal 2017.
|
($ in millions)
|
|
February 1,
2020 (2)
|
|
February 2,
2019 |
||||
U.S. (1)
|
|
$
|
7,169
|
|
|
$
|
3,097
|
|
Other regions
|
|
1,773
|
|
|
586
|
|
||
Total long-lived assets
|
|
$
|
8,942
|
|
|
$
|
3,683
|
|
(1)
|
U.S. includes the United States, Puerto Rico, and Guam.
|
(2)
|
Reflects the adoption of the new lease accounting standard. Prior period amounts have not been restated and continue to be reported under accounting standards in effect for those periods.
|
($ in millions)
|
As of
March 4,
2019
|
||
Inventory
|
$
|
34
|
|
Property and equipment
|
15
|
|
|
Operating lease assets
|
51
|
|
|
Intangible assets
|
37
|
|
|
Net assets acquired
|
137
|
|
|
Operating lease liabilities
|
(64
|
)
|
|
Other liabilities
|
(4
|
)
|
|
Total consideration paid
|
$
|
69
|
|
(in millions)
|
|
Recorded in cost of goods sold and occupancy expenses
|
|
Recorded in operating expenses
|
|
Costs Incurred in fiscal 2019
|
||||||
Operating lease cost (1)
|
|
$
|
15
|
|
|
$
|
10
|
|
|
$
|
25
|
|
Impairment of long-lived assets
|
|
—
|
|
|
13
|
|
|
13
|
|
|||
Employee related cost
|
|
—
|
|
|
13
|
|
|
13
|
|
|||
Other
|
|
7
|
|
|
3
|
|
|
10
|
|
|||
Total store closing and other operating cost
|
|
$
|
22
|
|
|
$
|
39
|
|
|
$
|
61
|
|
(1)
|
In accordance with ASC 842, this cost includes lease termination fees and amortization expense.
|
|
|
13 Weeks Ended (2)
|
|
13 Weeks Ended (3)
|
|
13 Weeks Ended (4)
|
|
13 Weeks Ended (5)
|
|
52 Weeks
Ended (6)
|
||||||||||
($ in millions except per share amounts)
|
|
May 4,
2019 |
|
August 3,
2019 |
|
November 2,
2019 |
|
February 1,
2020 |
|
February 1, 2020
(fiscal 2019) |
||||||||||
Net sales
|
|
$
|
3,706
|
|
|
$
|
4,005
|
|
|
$
|
3,998
|
|
|
$
|
4,674
|
|
|
$
|
16,383
|
|
Gross profit
|
|
$
|
1,344
|
|
|
$
|
1,556
|
|
|
$
|
1,559
|
|
|
$
|
1,674
|
|
|
$
|
6,133
|
|
Net income (loss)
|
|
$
|
227
|
|
|
$
|
168
|
|
|
$
|
140
|
|
|
$
|
(184
|
)
|
|
$
|
351
|
|
Earnings (loss) per share—basic (1)
|
|
$
|
0.60
|
|
|
$
|
0.44
|
|
|
$
|
0.37
|
|
|
$
|
(0.49
|
)
|
|
$
|
0.93
|
|
Earnings (loss) per share—diluted (1)
|
|
$
|
0.60
|
|
|
$
|
0.44
|
|
|
$
|
0.37
|
|
|
$
|
(0.49
|
)
|
|
$
|
0.93
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
13 Weeks Ended
|
|
13 Weeks Ended
|
|
13 Weeks Ended
|
|
13 Weeks Ended
|
|
52 Weeks Ended
|
||||||||||
($ in millions except per share amounts)
|
|
May 5,
2018 |
|
August 4,
2018 |
|
November 3,
2018 |
|
February 2,
2019 |
|
February 2, 2019
(fiscal 2018) |
||||||||||
Net sales
|
|
$
|
3,783
|
|
|
$
|
4,085
|
|
|
$
|
4,089
|
|
|
$
|
4,623
|
|
|
$
|
16,580
|
|
Gross profit
|
|
$
|
1,427
|
|
|
$
|
1,627
|
|
|
$
|
1,623
|
|
|
$
|
1,645
|
|
|
$
|
6,322
|
|
Net income
|
|
$
|
164
|
|
|
$
|
297
|
|
|
$
|
266
|
|
|
$
|
276
|
|
|
$
|
1,003
|
|
Earnings per share—basic (1)
|
|
$
|
0.42
|
|
|
$
|
0.77
|
|
|
$
|
0.69
|
|
|
$
|
0.72
|
|
|
$
|
2.61
|
|
Earnings per share—diluted (1)
|
|
$
|
0.42
|
|
|
$
|
0.76
|
|
|
$
|
0.69
|
|
|
$
|
0.72
|
|
|
$
|
2.59
|
|
(1)
|
Earnings per share ("EPS") was computed individually for each of the periods presented; therefore, the sum of the EPS for the quarters may not equal the total for the year.
|
(2)
|
During the first quarter of fiscal 2019, there was a pre-tax gain of $191 million related to the sale of a building, which was recorded as a reduction to operating expenses and benefited diluted EPS by $0.37.
|
(3)
|
During the second quarter of fiscal 2019, the Company incurred $38 million of separation-related costs and $14 million for specialty fleet restructuring costs, both on a pre-tax basis, all of which was recorded in operating expenses. The impact of the separation-related and restructuring costs to diluted EPS was $0.08 and $0.03, respectively. Additionally, during the second quarter of fiscal 2019, there was an additional $30 million of tax expense related to an adjustment to our fiscal 2017 tax liability for additional guidance issued by the U.S. Treasury Department regarding the TCJA. The impact of the tax adjustment to diluted EPS was $0.08.
|
(4)
|
During the third quarter of fiscal 2019, the Company incurred $70 million for separation-related costs and $8 million for specialty fleet restructuring costs, both on a pre-tax basis, substantially all of which was recorded in operating expenses. The impact of the separation-related and restructuring costs to diluted EPS was $0.14 and $0.02, respectively.
|
(5)
|
During the fourth quarter of fiscal 2019, the Company incurred $296 million for impairment charges related to flagship stores, $189 million for separation-related costs including costs for the cancellation of our separation, and $38 million for specialty fleet restructuring costs, all on a pre-tax basis. Substantially all of the flagship impairment charges and separation-related costs were recorded in operating expenses and $17 million for specialty fleet restructuring costs was recorded in operating expenses. The impact of the impairment charges, separation-related costs, and restructuring costs to diluted EPS was $0.59, $0.38, and $0.10, respectively.
|
(6)
|
In total, during fiscal year 2019, the Company incurred $301 million of separation-related costs including costs for the cancellation of our separation, $296 million of flagship impairment charges, and $61 million of specialty fleet restructuring costs, all on a pre-tax basis. There was also a $191 million pre-tax gain on the sale of a building during fiscal 2019. Additionally, there was a $30 million unfavorable impact to net income related to an adjustment to our fiscal 2017 tax liability for additional guidance issued by the U.S. Treasury Department regarding the TCJA. The total fiscal year 2019 net impact to diluted EPS was $1.04 for these items.
|
1.
|
Financial Statements: See “Index to Consolidated Financial Statements” in Part II, Item 8 of this Form 10-K.
|
2.
|
Financial Statement Schedules: Schedules are included in the Consolidated Financial Statements or notes of this Form 10-K or are not required.
|
3.
|
Exhibits: The exhibits listed in the below Exhibit Index are filed or incorporated by reference as part of this Form 10-K.
|
|
|
|
|
Incorporated by Reference
|
|
|
||||||
Exhibit
No.
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit
|
|
Filing Date
|
|
Filed/
Furnished
Herewith
|
3.1
|
|
Amended and Restated Certificate of Incorporation. (P)
|
|
10-K
|
|
1-7562
|
|
3.1
|
|
April 26, 1993
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certificate of Amendment of Amended and Restated Certificate of Incorporation.
|
|
10-K
|
|
1-7562
|
|
3.2
|
|
April 4, 2000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amended and Restated Bylaws (effective March 23, 2020).
|
|
8-K
|
|
1-7562
|
|
3.1
|
|
March 5, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indenture, dated as of April 12, 2011, by and between Registrant and Wells Fargo Bank, National Association, as Trustee.
|
|
8-K
|
|
1-7562
|
|
4.1
|
|
April 12, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Supplemental Indenture, dated as of April 12, 2011, relating to the issuance of $1,250,000,000 aggregate principal amount of Registrant’s 5.95% Notes due 2021.
|
|
8-K
|
|
1-7562
|
|
4.2
|
|
April 12, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Registrant’s 5.95% Notes due 2021, included as Exhibit A to First Supplemental Indenture.
|
|
8-K
|
|
1-7562
|
|
4.2
|
|
April 12, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description of Registrant's securities registered pursuant to Section 12 of the Securities Exchange Act of 1934.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Amended and Restated Revolving Credit Agreement dated May 31, 2018.
|
|
10-Q
|
|
1-7562
|
|
10.1
|
|
August 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.2*
|
|
Amended and Restated Consumer Credit Card Program Agreement by and among Registrant, Gap (Puerto Rico), Inc., GPS Consumer Direct, Inc., Gap (Apparel), LLC, Gap (ITM) Inc., GE Capital Retail Bank and GE Capital Retail Finance Corporation, dated as of February 28, 2014.
|
|
10-Q/A
|
|
1-7562
|
|
10.1
|
|
October 10, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Amendment to Amended and Restated Consumer Credit Card Program Agreement by and among Registrant, Gap (Puerto Rico), Inc., GPS Consumer Direct, Inc., Gap (Apparel), LLC, Gap (ITM) Inc., Synchrony Bank (f/k/a GE Capital Retail Bank) and Synchrony Financial, dated as of January 31, 2015.
|
|
10-K
|
|
1-7562
|
|
10.12
|
|
March 23, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.4*
|
|
Second Amendment to Amended and Restated Consumer Credit Card Program Agreement by and among Registrant, Gap (Puerto Rico), Inc., GPS Consumer Direct, Inc., Gap (Apparel), LLC, Gap (ITM) Inc., Synchrony Bank (f/k/a GE Capital Retail Bank) and Synchrony Financial, dated as of May 8, 2015.
|
|
10-Q
|
|
1-7562
|
|
10.1
|
|
September 8, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.5*
|
|
Third Amendment to Amended and Restated Consumer Credit Card Program Agreement by and among Registrant, Gap (Puerto Rico), Inc., GPS Consumer Direct, Inc., Gap (Apparel), LLC, Gap (ITM) Inc., Synchrony Bank (f/k/a GE Capital Retail Bank) and Synchrony Financial, dated as of December 15, 2015.
|
|
10-K
|
|
1-7562
|
|
10.16
|
|
March 21, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.6*
|
|
Fourth Amendment to Amended and Restated Consumer Credit Card Program Agreement by and among Registrant, Gap (Puerto Rico), Inc., GPS Consumer Direct, Inc., Gap (Apparel), LLC, Gap (ITM) Inc., SynchronyBank (f/k/a GE Capital Retail Bank) and Synchrony Financial, dated as of April 29, 2016.
|
|
10-Q
|
|
1-7562
|
|
10.1
|
|
June 3, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.7*
|
|
Fifth Amendment to Amended and Restated Consumer Credit Card Program Agreement by and among Registrant, Gap (Puerto Rico), Inc., GPS Consumer Direct, Inc., Gap (Apparel), LLC, Gap (ITM) Inc., Synchrony Bank (f/k/a GE Capital Retail Bank) and Synchrony Financial, dated as of April 7, 2017.
|
|
10-Q
|
|
1-7562
|
|
10.1
|
|
June 5, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.8*
|
|
Sixth Amendment to Amended and Restated Consumer Credit Card Program Agreement by and among Registrant, Gap (Puerto Rico), Inc., GPS Consumer Direct, Inc., Gap (Apparel), LLC, Gap (ITM) Inc., Synchrony Bank (f/k/a GE Capital Retail Bank) and Synchrony Financial, dated as of May 22, 2018.
|
|
10-Q
|
|
1-7562
|
|
10.2
|
|
August 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.9†
|
|
Executive Management Incentive Compensation Award Plan.
|
|
DEF 14A
|
|
1-7562
|
|
App. A
|
|
April 7, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Gap, Inc. Executive Deferred Compensation Plan (January 1, 1999 Restatement).
|
|
10-Q
|
|
1-7562
|
|
10.3
|
|
December 15, 1998
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amendment to Executive Deferred Compensation Plan - Freezing of Plan Effective December 31, 2005.
|
|
8-K
|
|
1-7562
|
|
10.1
|
|
November 8, 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amendment to Executive Deferred Compensation Plan - Merging of Plan into the Supplemental Deferred Compensation Plan.
|
|
10-K
|
|
1-7562
|
|
10.29
|
|
March 27, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amendment to Executive Deferred Compensation Plan - Suspension of Pending Merger into Supplemental Deferred Compensation Plan.
|
|
10-K
|
|
1-7562
|
|
10.30
|
|
March 27, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amendment to Executive Deferred Compensation Plan - Merging of Plan into the Deferred Compensation Plan.
|
|
10-Q
|
|
1-7562
|
|
10.1
|
|
December 8, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred Compensation Plan, amended and restated effective September 1, 2011.
|
|
10-Q
|
|
1-7562
|
|
10.1
|
|
December 7, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred Compensation Plan, amended and restated effective November 17, 2015.
|
|
10-K
|
|
1-7562
|
|
10.24
|
|
March 21, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred Compensation Plan, amended and restated effective March 24, 2016.
|
|
10-Q
|
|
1-7562
|
|
10.2
|
|
June 3, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Deferred Compensation Plan.
|
|
S-8
|
|
333-129986
|
|
4.1
|
|
November 29, 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Amendment to Supplemental Deferred Compensation Plan.
|
|
10-K
|
|
1-7562
|
|
10.32
|
|
March 27, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Amendment to Supplemental Deferred Compensation Plan - Merging of Executive Deferred Compensation Plan into the Plan and Name Change to Deferred Compensation Plan.
|
|
10-K
|
|
1-7562
|
|
10.33
|
|
March 27, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Amendment to Supplemental Deferred Compensation Plan - Suspension of Pending Merging of Executive Deferred Compensation Plan into the Plan and Name Change to Deferred Compensation Plan.
|
|
10-K
|
|
1-7562
|
|
10.34
|
|
March 27, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Amendment to Supplemental Deferred Compensation Plan - Merging of Executive Deferred Compensation Plan into the Plan and Name Change to Deferred Compensation Plan.
|
|
10-Q
|
|
1-7562
|
|
10.2
|
|
December 8, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011 Long-Term Incentive Plan.
|
|
DEF 14A
|
|
1-7562
|
|
App. A
|
|
April 5, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amended and Restated 2011 Long-Term Incentive Plan (effective February 26, 2014).
|
|
8-K
|
|
1-7562
|
|
10.1
|
|
March 6, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 Long-Term Incentive Plan.
|
|
DEF 14A
|
|
1-7562
|
|
App. A
|
|
April 5, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amended and Restated 2016 Long-Term Incentive Plan (effective February 22, 2017).
|
|
10-K
|
|
1-7562
|
|
10.30
|
|
March 20, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amended and Restated 2016 Long Term-Incentive Plan (effective May 21, 2019).
|
|
DEF 14A
|
|
1-7562
|
|
App. A
|
|
April 9, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Non-Qualified Stock Option Agreement for Executives under the 2006 Long-Term Incentive Plan.
|
|
8-K
|
|
1-7562
|
|
10.1
|
|
March 23, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Non-Qualified Stock Option Agreement under the 2011 Long-Term Incentive Plan.
|
|
10-Q
|
|
1-7562
|
|
10.8
|
|
June 8, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Non-Qualified Stock Option Agreement under the 2011 Long-Term Incentive Plan.
|
|
10-Q
|
|
1-7562
|
|
10.9
|
|
August 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Non-Qualified Stock Option Agreement under the 2011 Long-Term Incentive Plan.
|
|
10-K
|
|
1-7562
|
|
10.72
|
|
March 26, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Non-Qualified Stock Option Agreement under the 2011 Long-Term Incentive Plan.
|
|
8-K
|
|
1-7562
|
|
10.2
|
|
March 6, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Non-Qualified Stock Option Agreement under the 2011 Long-Term Incentive Plan.
|
|
8-K
|
|
1-7562
|
|
10.1
|
|
March 6, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Non-Qualified Stock Option Agreement under the 2011 Long-Term Incentive Plan.
|
|
10-K
|
|
1-7562
|
|
10.60
|
|
March 21, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Non-Qualified Stock Option Agreement under the 2016 Long-Term Incentive Plan.
|
|
8-K
|
|
1-7562
|
|
10.1
|
|
March 9, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Non-Qualified Stock Option Agreement under the 2016 Long-Term Incentive Plan.
|
|
8-K
|
|
1-7562
|
|
10.1
|
|
March 16, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Non-Qualified Stock Option Agreement under the 2016 Long-Term Incentive Plan.
|
|
8-K
|
|
1-7562
|
|
10.1
|
|
March 15, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Stock Award Agreement for Executives under the 2006 Long-Term Incentive Plan, filed as Exhibit 10.2.
|
|
8-K
|
|
1-7562
|
|
10.2
|
|
March 23, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Performance Share Agreement under the 2011 Long-Term Incentive Plan.
|
|
8-K
|
|
1-7562
|
|
10.3
|
|
March 6, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Performance Share Agreement under the 2011 Long-Term Incentive Plan.
|
|
10-K
|
|
1-7562
|
|
10.69
|
|
March 21, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Performance Share Agreement under the 2016 Long-Term Incentive Plan.
|
|
8-K
|
|
1-7562
|
|
10.3
|
|
March 9, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Performance Share Agreement under the 2016 Long-Term Incentive Plan.
|
|
8-K
|
|
1-7562
|
|
10.3
|
|
March 16, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Performance Share Agreement under the 2016 Long-Term Incentive Plan.
|
|
8-K
|
|
1-7562
|
|
10.3
|
|
March 15, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Restricted Stock Unit Award Agreement under the 2011 Long-Term Incentive Plan.
|
|
8-K
|
|
1-7562
|
|
10.2
|
|
March 6, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Restricted Stock Unit Award Agreement under the 2011 Long-Term Incentive Plan.
|
|
10-K
|
|
1-7562
|
|
10.75
|
|
March 21, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Restricted Stock Unit Award Agreement under the 2016 Long-Term Incentive Plan.
|
|
8-K
|
|
1-7562
|
|
10.2
|
|
March 9, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Restricted Stock Unit Award Agreement under the 2016 Long-Term Incentive Plan.
|
|
8-K
|
|
1-7562
|
|
10.2
|
|
March 16, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Restricted Stock Unit Award Agreement under the 2016 Long-Term Incentive Plan.
|
|
8-K
|
|
1-7562
|
|
10.2
|
|
March 15, 2019
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
Form of Restricted Stock Unit Award Agreement (Retention Version) under the 2016 Long-Term Incentive Plan.
|
|
8-K
|
|
1-7562
|
|
10.4
|
|
March 16, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Director Stock Unit Agreement and Stock Unit Deferral Election Form under the 2011 Long-Term Incentive Plan.
|
|
10-Q
|
|
1-7562
|
|
10.10
|
|
June 8, 2011
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|
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|
|
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|
|
Form of Director Stock Unit Agreement and Stock Unit Deferral Election Form under the 2011 Long-Term Incentive Plan.
|
|
8-K
|
|
1-7562
|
|
10.5
|
|
March 6, 2014
|
|
|
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|
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|
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|
|
|
|
|
|
|
Form of Director Stock Unit Agreement and Stock Unit Deferral Election Form under the 2011 Long-Term Incentive Plan.
|
|
8-K
|
|
1-7562
|
|
10.4
|
|
March 6, 2015
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
Form of Director Stock Unit Agreement and Stock Unit Deferral Election Form under the 2011 Long-Term Incentive Plan.
|
|
10-K
|
|
1-7562
|
|
10.79
|
|
March 21, 2016
|
|
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|
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|
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|
|
|
|
|
|
|
|
Form of Director Stock Unit Agreement and Stock Unit Deferral Election Form under the 2016 Long-Term Incentive Plan.
|
|
8-K
|
|
1-7562
|
|
10.4
|
|
March 9, 2017
|
|
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|
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|
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|
|
|
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Agreement with Mark Breitbard dated February 27, 2017 and confirmed on March 2, 2017.
|
|
10-Q
|
|
1-7562
|
|
10.1
|
|
August 25, 2017
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Agreement for Post-Termination Benefits with Mark Breitbard dated June 2, 2017, filed as Exhibit 10.2 to Registrant's Form 10-Q for the quarter ended April 29, 2017, Commission File No. 1-7562.
|
|
10-Q
|
|
1-7562
|
|
10.2
|
|
June 5, 2017
|
|
|
|
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|
Letter Agreement dated March 9, 2020 by and between Mark Breitbard and the Registrant
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|
|
X
|
|
|
|
|
|
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|
Agreement with Shawn Curran dated September 29, 2017 and confirmed on October 5, 2017.
|
|
10-Q
|
|
1-7562
|
|
10.1
|
|
November 22, 2017
|
|
|
|
|
|
|
|
|
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|
|
|
|
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|
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|
Agreement with Sebastian DiGrande dated April 22, 2016 and confirmed on April 22, 2016.
|
|
10-Q
|
|
1-7562
|
|
10.1
|
|
September 2, 2016
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|
|
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|
Agreement for Post-Termination Benefits with Sebastian DiGrande dated June 2, 2017, filed as Exhibit 10.4 to Registrant's Form 10-Q for the quarter ended April 29, 2017, Commission File No. 1-7562.
|
|
10-Q
|
|
1-7562
|
|
10.4
|
|
June 5, 2017
|
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Agreement with Neil Fiske dated June 11, 2018.
|
|
10-Q
|
|
1-7562
|
|
10.3
|
|
August 31, 2018
|
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Agreement with Julie Gruber dated February 1, 2016 and confirmed on February 4, 2016, filed as Exhibit 10.3 to Registrant's Form 10-Q for the quarter ended April 30, 2016, Commission File No. 1-7562.
|
|
10-Q
|
|
1-7562
|
|
10.3
|
|
June 3, 2016
|
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|
Agreement for Post-Termination Benefits with Julie Gruber dated June 2, 2017, filed as Exhibit 10.5 to Registrant's Form 10-Q for the quarter ended April 29, 2017, Commission File No. 1-7562.
|
|
10-Q
|
|
1-7562
|
|
10.5
|
|
June 5, 2017
|
|
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|
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|
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|
Letter Agreement dated March 10, 2020 by and between Julie Gruber and the Registrant
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|
X
|
|
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|
Agreement with Brent Hyder dated February 25, 2019 and confirmed on February 26, 2019.
|
|
10-Q
|
|
1-7562
|
|
10.1
|
|
May 31, 2019
|
|
|
|
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|
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|
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|
Letter Agreement dated November 10, 2016 by and between Teri List-Stoll and the Registrant dated November 10, 2016 and confirmed on November 10, 2016.
|
|
8-K
|
|
1-7562
|
|
10.1
|
|
November 15, 2016
|
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|
Agreement for Post-Termination Benefits with Teri List-Stoll dated June 2, 2017, filed as Exhibit 10.8 to Registrant's Form 10-Q for the quarter ended April 29, 2017, Commission File No. 1-7562.
|
|
10-Q
|
|
1-7562
|
|
10.8
|
|
June 5, 2017
|
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|
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|
Letter Agreement with Art Peck dated October 3, 2014.
|
|
8-K
|
|
1-7562
|
|
10.1
|
|
October 8, 2014
|
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|
Agreement for Post-Termination Benefits with Art Peck dated June 2, 2017, filed as Exhibit 10.9 to Registrant's Form 10-Q for the quarter ended April 29, 2017, Commission File No. 1-7562.
|
|
10-Q
|
|
1-7562
|
|
10.9
|
|
June 5, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agreement with Art Peck dated June 1, 2018.
|
|
8-K
|
|
1-7562
|
|
10.1
|
|
June 4, 2018
|
|
|
|
|
|
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|
|
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|
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|
Agreement and Release by and between Art Peck and the Registrant dated December 2, 2019 (amending that certain Agreement for Post-Termination Benefits with Art Peck dated June 2, 2017).
|
|
|
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|
X
|
|
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|
Agreement with Sonia Syngal dated April 11, 2016 and confirmed on April 11, 2016.
|
|
8-K
|
|
1-7562
|
|
10.1
|
|
April 13, 2016
|
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|
|
|
|
|
|
|
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|
|
|
|
Agreement for Post-Termination Benefits with Sonia Syngal dated June 2, 2017, filed as Exhibit 10.10 to Registrant's Form 10-Q for the quarter ended April 29, 2017, Commission File No. 1-7562.
|
|
10-Q
|
|
1-7562
|
|
10.10
|
|
June 5, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Letter Agreement dated March 10, 2020 by and between Katrina O'Connell and the Registrant
|
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|
|
|
X
|
|
|
|
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|
|
|
Code of Business Conduct.
|
|
10-K
|
|
1-7562
|
|
14
|
|
March 26, 2010
|
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|
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|
|
Subsidiaries of Registrant.
|
|
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|
X
|
|
|
|
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|
|
Consent of Independent Registered Public Accounting Firm.
|
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|
|
|
|
|
|
X
|
|
|
|
|
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|
|
Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer of The Gap, Inc. (Section 302 of the Sarbanes-Oxley Act of 2002).
|
|
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|
X
|
|
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|
|
|
Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer of The Gap, Inc. (Section 302 of the Sarbanes-Oxley Act of 2002).
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
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|
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|
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|
|
Certification of the Chief Executive Officer of The Gap, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
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|
|
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|
|
Certification of the Chief Financial Officer of The Gap, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101
|
|
The following materials from The Gap, Inc.’s Annual Report on Form 10-K for the year ended February 1, 2020, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Stockholders’ Equity, (v) the Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
104
|
|
Cover Page Interactive Data File (embedded within the Inline XBRL document).
|
|
|
|
|
|
|
|
|
|
X
|
*
|
Pursuant to a request for confidential treatment, confidential portions of this Exhibit have been redacted and have been filed separately with the Securities and Exchange Commission.
|
†
|
Indicates management contract or compensatory plan or arrangement.
|
|
|
|
|
|
|
|
|
THE GAP, INC.
|
|
|
|
|
|
|
Date:
|
March 17, 2020
|
|
By
|
/s/ ROBERT J. FISHER
|
|
|
|
|
Robert J. Fisher
Interim Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
|
|
Date:
|
March 17, 2020
|
|
By
|
/s/ TERI LIST-STOLL
|
|
|
|
|
Teri List-Stoll
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
March 17, 2020
|
|
By
|
/s/ AMY BOHUTINSKY
|
|
|
|
|
Amy Bohutinsky, Director
|
|
|
|
|
|
Date:
|
March 17, 2020
|
|
By
|
/s/ JOHN J. FISHER
|
|
|
|
|
John J. Fisher, Director
|
|
|
|
|
|
Date:
|
March 17, 2020
|
|
By
|
/s/ ROBERT J. FISHER
|
|
|
|
|
Robert J. Fisher, Director
|
|
|
|
|
|
Date:
|
March 17, 2020
|
|
By
|
/s/ WILLIAM S. FISHER
|
|
|
|
|
William S. Fisher, Director
|
|
|
|
|
|
Date:
|
March 17, 2020
|
|
By
|
/s/ TRACY GARDNER
|
|
|
|
|
Tracy Gardner, Director
|
|
|
|
|
|
Date:
|
March 17, 2020
|
|
By
|
/s/ ISABELLA D. GOREN
|
|
|
|
|
Isabella D. Goren, Director
|
|
|
|
|
|
Date:
|
March 17, 2020
|
|
By
|
/s/ BOB L. MARTIN
|
|
|
|
|
Bob L. Martin, Director
|
|
|
|
|
|
Date:
|
March 17, 2020
|
|
By
|
/s/ JORGE P. MONTOYA
|
|
|
|
|
Jorge P. Montoya, Director
|
|
|
|
|
|
Date:
|
March 17, 2020
|
|
By
|
/s/ CHRIS O'NEILL
|
|
|
|
Chris O'Neill, Director
|
|
|
|
|
|
|
Date:
|
March 17, 2020
|
|
By
|
/s/ LEXI REESE
|
|
|
|
|
Lexi Reese, Director
|
|
|
|
|
|
Date:
|
March 17, 2020
|
|
By
|
/s/ MAYO A. SHATTUCK III
|
|
|
|
|
Mayo A. Shattuck III, Director
|
•
|
Restricting dividends on the common stock;
|
•
|
Diluting the voting power of the common stock;
|
•
|
Impairing the liquidation rights of the common stock; or
|
•
|
Delaying or preventing a change in control of Gap without further action by the stockholders.
|
•
|
Is the beneficial owner of more than 5% of the voting power of (a) all outstanding shares of common stock, (b) all outstanding shares of Class B common stock or (c) all outstanding shares with voting rights;
|
•
|
Is our affiliate and at any time within the two-year period before the date in question owned or was the beneficial owner of more than 5% of the voting power of (a) all outstanding shares of common stock, (b) all outstanding shares of Class B common stock or (c) all outstanding shares with voting rights; or
|
•
|
Is an assignee of or has otherwise succeeded to (by means other than through a public offering) any shares of our stock with voting rights which were owned by an interested stockholder at any time in the preceding two years.
|
•
|
A merger or consolidation of us or any of our subsidiaries with an interested stockholder;
|
•
|
A merger or consolidation of us or any of our subsidiaries with another corporation which, after such merger or consolidation, would be an affiliate of an interested stockholder;
|
•
|
A sale, lease, exchange, mortgage, pledge, transfer or other disposition of our property or the property of any of our subsidiaries representing 5% or more of our overall book value to an interested stockholder or an affiliate thereof, or the issuance or transfer by us to an interested stockholder or an affiliate thereof of our securities, or the securities of any of our subsidiaries, in exchange for cash, securities or other property having such fair market value; or
|
•
|
Any recapitalization or reclassification of our securities, or any merger or consolidation, that has the effect of increasing the voting power of an interested stockholder.
|
•
|
The business combination is approved by a majority of the members of the Board of Directors who are not affiliated with the interested stockholder and who were Board members prior to the interested stockholder becoming an interested stockholder or who were recommended by a majority of such Board members; or
|
•
|
The consideration to be paid by the interested stockholder in the business combination meets various tests designed to ensure that the form and amount of consideration to be paid by the interested stockholder is fair to the other stockholders.
|
•
|
before such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;
|
•
|
upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction began, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned (i) by persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
|
•
|
on or after such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of the stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder.
|
•
|
any merger or consolidation involving the corporation and the interested stockholder;
|
•
|
any sale, lease, exchange, mortgage, transfer, pledge or other disposition of 10% or more of either the assets or outstanding stock of the corporation involving the interested stockholder;
|
•
|
subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;
|
•
|
any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or
|
•
|
the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits by or through the corporation.
|
1.
|
Gap and Peck entered into an Agreement for Post-Termination Benefits (“Severance Agreement”), dated June 2, 2017, which provides certain specified severance compensation and benefits (“Severance”) in the event of Peck’s termination. Company will terminate the employment of Peck on November 15, 2019. Peck’s Separation from Service, as that term is defined in the Severance Agreement, is November 15, 2019. Therefore, Peck is eligible for Severance, as long as certain conditions in the Severance Agreement are met, including Peck’s execution of the release below.
|
2.
|
Gap agrees to provide clarification to Peck regarding certain terms in the Severance Agreement under sub (1) of the Severance Agreement:
|
a.
|
The term, “employment and professional relationship,” does not apply to passive investments.
|
b.
|
The term, “employment and professional relationship with a competitor,” does not apply to work for a private equity firm that may have apparel holdings but where Peck’s work does not involve a competitor.
|
3.
|
In consideration of the promises that Gap makes, Peck agrees as follows:
|
a.
|
Peck hereby acknowledges that during his tenure as CEO, he has taken no action in violation of the Gap Code of Business Conduct and specifically has not participated in any business venture that is competitive with Gap. Peck acknowledges that Gap’s determination of Peck’s eligibility for Severance under the Severance Agreement is predicated on Peck’s assertion.
|
b.
|
Peck hereby acknowledges that under the terms of the Severance Agreement, he is not eligible for Severance if he accepts employment or a professional relationship with a competitor, as that term is defined in the Separation Agreement. Further, Peck acknowledges that any compensation received from a non-competitor will reduce the amount of Severance Peck receives. Therefore, Peck agrees that he will timely inform Gap of any such employment or professional relationship with a competitor, or any compensation received from a non-competitor. Any failure to inform Gap of such employment or professional relationship will be deemed a breach of this Agreement and will result in the immediate cessation of any Severance and the return of any Severance that was received as a result of Peck’s failure to inform.
|
c.
|
Peck hereby releases and forever discharges Gap, its subsidiaries, affiliates, officers, directors, agents and employees, from any and all claims, liabilities and obligations, of every kind and nature, whether now known or unknown, suspected or unsuspected, which Peck ever had, or now has, with the exception of claims that cannot be legally waived. This release includes all federal and state statutory claims, federal and state common law claims (including those for contract and tort), and claims under any federal or state anti-discrimination statute or ordinance, including but not limited to, Title VII of the Civil Rights
|
/s/ Art Peck
|
|
11/27/2019
|
Art Peck
|
|
Date
|
|
|
|
/s/ Julie Gruber
|
|
12/2/2019
|
Gap Inc.
|
|
Date
|
By: Julie Gruber, Executive Vice President
|
|
|
Athleta (ITM) Inc.
|
California
|
Athleta LLC
|
Delaware
|
Athleta, Inc.
|
Delaware
|
Banana Republic (Apparel), LLC
|
California
|
Banana Republic (ITM) Inc.
|
California
|
Banana Republic (Japan) Y.K.
|
Tokyo, Japan
|
Banana Republic, LLC
|
Delaware
|
Corporate HQ Support Mexico, S. de R.L. de C.V.
|
Mexico
|
Direct Consumer Services, LLC
|
California
|
Forth & Towne (Japan) Y.K.
|
Tokyo, Japan
|
Gap (Apparel), LLC
|
California
|
Gap (Beijing) Commercial Co., Ltd.
|
Beijing, China
|
Gap (Canada) Inc.
|
Canada
|
Gap (France) SAS
|
Paris, France
|
Gap (Italy) Srl.
|
Milan, Italy
|
Gap (ITM) Inc.
|
California
|
Gap (Japan) K.K.
|
Tokyo, Japan
|
Gap (Puerto Rico), Inc.
|
Puerto Rico
|
Gap (RHC) B.V.
|
Amsterdam, The Netherlands
|
Gap (Shanghai) Commercial Co., Ltd.
|
Shanghai, China
|
Gap (UK Holdings) Limited
|
England and Wales
|
Gap Europe Limited
|
England and Wales
|
Gap International Sales, Inc.
|
Delaware
|
Gap International Sourcing (Americas) LLC
|
California
|
Gap International Sourcing (California), LLC
|
California
|
Gap International Sourcing (Holdings) Limited
|
Hong Kong
|
Gap International Sourcing (India) Private Limited
|
New Delhi, India
|
Gap International Sourcing (JV), LLC
|
California
|
Gap International Sourcing (U.S.A.) Inc.
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California
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Gap International Sourcing (Vietnam) Limited Liability Company
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Vietnam
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Gap International Sourcing Limited
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Hong Kong
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Gap International Sourcing Pte. Ltd.
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Singapore
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Gap International Sourcing, Inc.
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California
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Gap IT Services India Private Limited
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India
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Gap Limited
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Hong Kong
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Gap Services, Inc.
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California
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Gap Stores (Ireland) Limited
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Dublin, Ireland
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Gap Taiwan Limited
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Taipei, Taiwan
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GPS (Great Britain) Limited
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England and Wales
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GPS Consumer Direct, Inc.
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California
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GPS Corporate Facilities, Inc.
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California
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GPS Import Services, S. de R.L. de C.V.
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Mexico
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1.
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I have reviewed this annual report on Form 10-K of The Gap, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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March 17, 2020
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/s/ Robert J. Fisher
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Robert J. Fisher
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Interim Chief Executive Officer
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(Principal Executive Officer)
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1.
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I have reviewed this annual report on Form 10-K of The Gap, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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March 17, 2020
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/s/ Teri List-Stoll
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Teri List-Stoll
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
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/s/ Robert J. Fisher
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Robert J. Fisher
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Interim Chief Executive Officer
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March 17, 2020
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/s/ Teri List-Stoll
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Teri List-Stoll
Executive Vice President and Chief Financial Officer
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March 17, 2020
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