☑ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 94-1697231 | |||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
Common Stock, $0.05 par value | GPS | The New York Stock Exchange |
Large accelerated filer | ☑ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | ☐ | ||||||||||||||||
Emerging growth company | ☐ |
Page | ||||||||
Item 1. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 5. | ||||||||
Item 6. |
($ and shares in millions except par value) |
October 31,
2020 |
February 1,
2020 |
November 2,
2019 |
||||||||||||||
ASSETS | |||||||||||||||||
Current assets: | |||||||||||||||||
Cash and cash equivalents | $ | 2,471 | $ | 1,364 | $ | 788 | |||||||||||
Short-term investments | 178 | 290 | 294 | ||||||||||||||
Merchandise inventory | 2,747 | 2,156 | 2,720 | ||||||||||||||
Other current assets | 966 | 706 | 770 | ||||||||||||||
Total current assets | 6,362 | 4,516 | 4,572 | ||||||||||||||
Property and equipment, net of accumulated depreciation of $5,891, $5,839 and $5,999
|
2,846 | 3,122 | 3,225 | ||||||||||||||
Operating lease assets | 4,460 | 5,402 | 5,796 | ||||||||||||||
Other long-term assets | 705 | 639 | 525 | ||||||||||||||
Total assets | $ | 14,373 | $ | 13,679 | $ | 14,118 | |||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||
Current liabilities: | |||||||||||||||||
Accounts payable | $ | 2,284 | $ | 1,174 | $ | 1,241 | |||||||||||
Accrued expenses and other current liabilities | 1,283 | 1,067 | 974 | ||||||||||||||
Current portion of operating lease liabilities | 823 | 920 | 934 | ||||||||||||||
Income taxes payable | 41 | 48 | 43 | ||||||||||||||
Total current liabilities | 4,431 | 3,209 | 3,192 | ||||||||||||||
Long-term liabilities: | |||||||||||||||||
Long-term debt | 2,214 | 1,249 | 1,249 | ||||||||||||||
Long-term operating lease liabilities | 4,899 | 5,508 | 5,650 | ||||||||||||||
Lease incentives and other long-term liabilities | 458 | 397 | 393 | ||||||||||||||
Total long-term liabilities | 7,571 | 7,154 | 7,292 | ||||||||||||||
Commitments and contingencies (see Note 9) | |||||||||||||||||
Stockholders’ equity: | |||||||||||||||||
Common stock $0.05 par value
|
|||||||||||||||||
Authorized 2,300 shares for all periods presented; Issued and Outstanding 374, 371, and 373 shares
|
19 | 19 | 19 | ||||||||||||||
Additional paid-in capital | 60 | — | — | ||||||||||||||
Retained earnings | 2,268 | 3,257 | 3,573 | ||||||||||||||
Accumulated other comprehensive income | 24 | 40 | 42 | ||||||||||||||
Total stockholders’ equity | 2,371 | 3,316 | 3,634 | ||||||||||||||
Total liabilities and stockholders’ equity | $ | 14,373 | $ | 13,679 | $ | 14,118 |
13 Weeks Ended | 39 Weeks Ended | ||||||||||||||||||||||
($ and shares in millions except per share amounts) |
October 31,
2020 |
November 2,
2019 |
October 31,
2020 |
November 2,
2019 |
|||||||||||||||||||
Net sales | $ | 3,994 | $ | 3,998 | $ | 9,376 | $ | 11,709 | |||||||||||||||
Cost of goods sold and occupancy expenses | 2,374 | 2,439 | 6,339 | 7,250 | |||||||||||||||||||
Gross profit | 1,620 | 1,559 | 3,037 | 4,459 | |||||||||||||||||||
Operating expenses | 1,445 | 1,338 | 4,033 | 3,640 | |||||||||||||||||||
Operating income (loss) | 175 | 221 | (996) | 819 | |||||||||||||||||||
Loss on extinguishment of debt | — | — | 58 | — | |||||||||||||||||||
Interest expense | 55 | 19 | 132 | 58 | |||||||||||||||||||
Interest income | (1) | (7) | (7) | (21) | |||||||||||||||||||
Income (loss) before income taxes | 121 | 209 | (1,179) | 782 | |||||||||||||||||||
Income taxes | 26 | 69 | (280) | 247 | |||||||||||||||||||
Net income (loss) | $ | 95 | $ | 140 | $ | (899) | $ | 535 | |||||||||||||||
Weighted-average number of shares - basic | 374 | 375 | 373 | 377 | |||||||||||||||||||
Weighted-average number of shares - diluted | 380 | 376 | 373 | 379 | |||||||||||||||||||
Earnings (loss) per share - basic | $ | 0.25 | $ | 0.37 | $ | (2.41) | $ | 1.42 | |||||||||||||||
Earnings (loss) per share - diluted | $ | 0.25 | $ | 0.37 | $ | (2.41) | $ | 1.41 | |||||||||||||||
13 Weeks Ended | 39 Weeks Ended | ||||||||||||||||||||||
($ in millions) |
October 31,
2020 |
November 2,
2019 |
October 31,
2020 |
November 2,
2019 |
|||||||||||||||||||
Net income (loss) | $ | 95 | $ | 140 | $ | (899) | $ | 535 | |||||||||||||||
Other comprehensive income (loss), net of tax | |||||||||||||||||||||||
Foreign currency translation | 5 | (4) | (14) | (5) | |||||||||||||||||||
Change in fair value of derivative financial instruments, net of tax of $—, $—, $1, and $5
|
(2) | — | 9 | 10 | |||||||||||||||||||
Reclassification adjustment for gains on derivative financial instruments, net of tax of $(1), $—, $(2), and $(5)
|
(1) | (9) | (11) | (16) | |||||||||||||||||||
Other comprehensive income (loss), net of tax | 2 | (13) | (16) | (11) | |||||||||||||||||||
Comprehensive income (loss) | $ | 97 | $ | 127 | $ | (915) | $ | 524 |
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 August 1, 2020 | 374 | $ | 19 | $ | 39 | $ | 2,173 | $ | 22 | $ | 2,253 | |||||||||||||||||||||||||||
Net income for the thirteen weeks ended October 31, 2020 | 95 | 95 | ||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | ||||||||||||||||||||||||||||||||||||||
Foreign currency translation | 5 | 5 | ||||||||||||||||||||||||||||||||||||
Change in fair value of derivative financial instruments | (2) | (2) | ||||||||||||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income | (1) | (1) | ||||||||||||||||||||||||||||||||||||
Issuance of common stock related to stock options and employee stock purchase plans | — | — | 4 | 4 | ||||||||||||||||||||||||||||||||||
Issuance of common stock and withholding tax payments related to vesting of stock units | — | — | — | — | ||||||||||||||||||||||||||||||||||
Share-based compensation, net of forfeitures | 17 | 17 | ||||||||||||||||||||||||||||||||||||
Common stock dividends (1) | — | — | ||||||||||||||||||||||||||||||||||||
Balance as of October 31, 2020 | 374 | $ | 19 | $ | 60 | $ | 2,268 | $ | 24 | $ | 2,371 | |||||||||||||||||||||||||||
Balance as of August 3, 2019 | 376 | $ | 19 | $ | — | $ | 3,551 | $ | 55 | $ | 3,625 | |||||||||||||||||||||||||||
Net income for the thirteen weeks ended November 2, 2019 | 140 | 140 | ||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | ||||||||||||||||||||||||||||||||||||||
Foreign currency translation | (4) | (4) | ||||||||||||||||||||||||||||||||||||
Change in fair value of derivative financial instruments | — | — | ||||||||||||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income | (9) | (9) | ||||||||||||||||||||||||||||||||||||
Repurchases and retirement of common stock | (3) | — | (23) | (27) | (50) | |||||||||||||||||||||||||||||||||
Issuance of common stock related to stock options and employee stock purchase plans | — | — | 5 | 5 | ||||||||||||||||||||||||||||||||||
Issuance of common stock and withholding tax payments related to vesting of stock units | — | — | (1) | (1) | ||||||||||||||||||||||||||||||||||
Share-based compensation, net of forfeitures | 19 | 19 | ||||||||||||||||||||||||||||||||||||
Common stock dividends declared and paid ($0.2425 per share)
|
(91) | (91) | ||||||||||||||||||||||||||||||||||||
Balance as of November 2, 2019 | 373 | $ | 19 | $ | — | $ | 3,573 | $ | 42 | $ | 3,634 |
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 February 1, 2020 | 371 | $ | 19 | $ | — | $ | 3,257 | $ | 40 | $ | 3,316 | |||||||||||||||||||||||||||
Net loss for the thirty-nine weeks ended October 31, 2020 | (899) | (899) | ||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | ||||||||||||||||||||||||||||||||||||||
Foreign currency translation | (14) | (14) | ||||||||||||||||||||||||||||||||||||
Change in fair value of derivative financial instruments | 9 | 9 | ||||||||||||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income | (11) | (11) | ||||||||||||||||||||||||||||||||||||
Issuance of common stock related to stock options and employee stock purchase plans | 1 | — | 16 | 16 | ||||||||||||||||||||||||||||||||||
Issuance of common stock and withholding tax payments related to vesting of stock units | 2 | — | (8) | (8) | ||||||||||||||||||||||||||||||||||
Share-based compensation, net of forfeitures | 52 | 52 | ||||||||||||||||||||||||||||||||||||
Common stock dividends ($0.2425 per share) (1)
|
(90) | (90) | ||||||||||||||||||||||||||||||||||||
Balance as of October 31, 2020 | 374 | $ | 19 | $ | 60 | $ | 2,268 | $ | 24 | $ | 2,371 | |||||||||||||||||||||||||||
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 for the thirty-nine weeks ended November 2, 2019 | 535 | 535 | ||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | ||||||||||||||||||||||||||||||||||||||
Foreign currency translation | (5) | (5) | ||||||||||||||||||||||||||||||||||||
Change in fair value of derivative financial instruments | 10 | 10 | ||||||||||||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income | (16) | (16) | ||||||||||||||||||||||||||||||||||||
Repurchases and retirement of common stock | (8) | — | (67) | (83) | (150) | |||||||||||||||||||||||||||||||||
Issuance of common stock related to stock options and employee stock purchase plans | 1 | — | 22 | 22 | ||||||||||||||||||||||||||||||||||
Issuance of common stock and withholding tax payments related to vesting of stock units | 2 | — | (21) | (21) | ||||||||||||||||||||||||||||||||||
Share-based compensation, net of forfeitures | 66 | 66 | ||||||||||||||||||||||||||||||||||||
Common stock dividends declared and paid ($0.7275 per share)
|
(274) | (274) | ||||||||||||||||||||||||||||||||||||
Balance as of November 2, 2019 | 373 | $ | 19 | $ | — | $ | 3,573 | $ | 42 | $ | 3,634 |
39 Weeks Ended | |||||||||||
($ in millions) |
October 31,
2020 |
November 2,
2019 |
|||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | $ | (899) | $ | 535 | |||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 381 | 417 | |||||||||
Share-based compensation | 55 | 64 | |||||||||
Impairment of operating lease assets | 361 | 1 | |||||||||
Impairment of store assets | 127 | 9 | |||||||||
Loss on extinguishment of debt | 58 | — | |||||||||
Amortization of debt issuance costs | 8 | 1 | |||||||||
Non-cash and other items | — | (4) | |||||||||
Gain on sale of building | — | (191) | |||||||||
Deferred income taxes | (74) | 42 | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Merchandise inventory | (590) | (559) | |||||||||
Other current assets and other long-term assets | 37 | 8 | |||||||||
Accounts payable | 1,120 | 129 | |||||||||
Accrued expenses and other current liabilities | 98 | 28 | |||||||||
Income taxes payable, net of receivables and other tax-related items | (206) | 89 | |||||||||
Lease incentives and other long-term liabilities | 54 | 19 | |||||||||
Operating lease assets and liabilities, net | (131) | (60) | |||||||||
Net cash provided by operating activities | 399 | 528 | |||||||||
Cash flows from investing activities: | |||||||||||
Purchases of property and equipment | (288) | (523) | |||||||||
Purchase of building | — | (343) | |||||||||
Proceeds from sale of building | — | 220 | |||||||||
Purchases of short-term investments | (237) | (235) | |||||||||
Proceeds from sales and maturities of short-term investments | 348 | 231 | |||||||||
Purchase of Janie and Jack | — | (69) | |||||||||
Other | 2 | — | |||||||||
Net cash used for investing activities | (175) | (719) | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from revolving credit facility | 500 | — | |||||||||
Payments for revolving credit facility
|
(500) | — | |||||||||
Proceeds from issuance of long-term debt
|
2,250 | — | |||||||||
Payments to extinguish debt
|
(1,307) | — | |||||||||
Payments for debt issuance costs
|
(61) | — | |||||||||
Proceeds from issuances under share-based compensation plans
|
16 | 22 | |||||||||
Withholding tax payments related to vesting of stock units | (8) | (21) | |||||||||
Repurchases of common stock | — | (150) | |||||||||
Cash dividends paid | — | (274) | |||||||||
Net cash provided by (used for) financing activities | 890 | (423) | |||||||||
Effect of foreign exchange rate fluctuations on cash, cash equivalents, and restricted cash | 4 | — | |||||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash | 1,118 | (614) | |||||||||
Cash, cash equivalents, and restricted cash at beginning of period | 1,381 | 1,420 | |||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 2,499 | $ | 806 | |||||||
Supplemental disclosure of cash flow information: | |||||||||||
Cash paid for interest during the period | $ | 41 | $ | 75 | |||||||
Cash paid for income taxes during the period, net of refunds | $ | 8 | $ | 117 | |||||||
($ in millions) |
October 31,
2020 |
February 1,
2020 |
November 2,
2019 |
||||||||||||||
Cash and cash equivalents, per Condensed Consolidated Balance Sheets | $ | 2,471 | $ | 1,364 | $ | 788 | |||||||||||
Restricted cash included in other current assets | 4 | — | — | ||||||||||||||
Restricted cash included in other long-term assets | 24 | 17 | 18 | ||||||||||||||
Total cash, cash equivalents, and restricted cash, per Condensed Consolidated Statements of Cash Flows | $ | 2,499 | $ | 1,381 | $ | 806 |
13 Weeks Ended | 39 Weeks Ended | ||||||||||||||||||||||
($ in millions) | October 31, 2020 | November 2, 2019 | October 31, 2020 | November 2, 2019 | |||||||||||||||||||
Store sales (1) | $ | 2,379 | $ | 2,992 | $ | 5,129 | $ | 8,981 | |||||||||||||||
Online sales (2) | 1,615 | 1,006 | 4,247 | 2,728 | |||||||||||||||||||
Total net sales | $ | 3,994 | $ | 3,998 | $ | 9,376 | $ | 11,709 | |||||||||||||||
($ in millions) |
October 31,
2020 |
February 1,
2020 |
November 2,
2019 |
||||||||||||||
2021 Notes | $ | — | $ | 1,249 | $ | 1,249 | |||||||||||
2023 Notes | 500 | — | — | ||||||||||||||
2025 Notes | 750 | — | — | ||||||||||||||
2027 Notes | 1,000 | — | — | ||||||||||||||
Less: Unamortized debt issuance costs | (36) | — | — | ||||||||||||||
Total long-term debt | $ | 2,214 | $ | 1,249 | $ | 1,249 |
Scheduled Maturity ($ in millions) | Principal | Interest Rate | Interest Payments | ||||||||||||||
Senior Secured Notes (1) | |||||||||||||||||
May 15, 2023 | $ | 500 | 8.375 | % | Semi-Annual | ||||||||||||
May 15, 2025 | 750 | 8.625 | % | Semi-Annual | |||||||||||||
May 15, 2027 | 1,000 | 8.875 | % | Semi-Annual | |||||||||||||
Total issuance | $ | 2,250 |
Fair Value Measurements at Reporting Date Using | |||||||||||||||||||||||
($ in millions) | October 31, 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 | $ | 678 | $ | 178 | $ | 500 | $ | — | |||||||||||||||
Short-term investments | 178 | 119 | 59 | — | |||||||||||||||||||
Derivative financial instruments | 6 | — | 6 | — | |||||||||||||||||||
Deferred compensation plan assets | 44 | 44 | — | — | |||||||||||||||||||
Other assets | 2 | — | — | 2 | |||||||||||||||||||
Total | $ | 908 | $ | 341 | $ | 565 | $ | 2 | |||||||||||||||
Liabilities: | |||||||||||||||||||||||
Derivative financial instruments | $ | 7 | $ | — | $ | 7 | $ | — | |||||||||||||||
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) | November 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 | $ | 238 | $ | 3 | $ | 235 | $ | — | |||||||||||||||
Short-term investments | 294 | 131 | 163 | — | |||||||||||||||||||
Derivative financial instruments | 12 | — | 12 | — | |||||||||||||||||||
Deferred compensation plan assets | 53 | 53 | — | — | |||||||||||||||||||
Other assets | 2 | — | — | 2 | |||||||||||||||||||
Total | $ | 599 | $ | 187 | $ | 410 | $ | 2 | |||||||||||||||
Liabilities: | |||||||||||||||||||||||
Derivative financial instruments | $ | 10 | $ | — | $ | 10 | $ | — |
($ in millions) |
October 31,
2020 |
February 1,
2020 |
November 2,
2019 |
||||||||||||||
Derivatives designated as cash flow hedges | $ | 474 | $ | 501 | $ | 640 | |||||||||||
Derivatives not designated as hedging instruments | 539 | 689 | 706 | ||||||||||||||
Total | $ | 1,013 | $ | 1,190 | $ | 1,346 |
($ in millions) |
October 31,
2020 |
February 1,
2020 |
November 2,
2019 |
||||||||||||||
Derivatives designated as cash flow hedges: | |||||||||||||||||
Other current assets | $ | 2 | $ | 6 | $ | 7 | |||||||||||
Other long-term assets | — | — | 1 | ||||||||||||||
Accrued expenses and other current liabilities | 1 | 2 | 2 | ||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||
Other current assets | 4 | 4 | 4 | ||||||||||||||
Accrued expenses and other current liabilities | 6 | 8 | 8 | ||||||||||||||
Total derivatives in an asset position | $ | 6 | $ | 10 | $ | 12 | |||||||||||
Total derivatives in a liability position | $ | 7 | $ | 10 | $ | 10 |
13 Weeks Ended | 39 Weeks Ended | ||||||||||||||||||||||
($ in millions) |
October 31,
2020 |
November 2,
2019 |
October 31,
2020 |
November 2,
2019 |
|||||||||||||||||||
Gain (loss) recognized in other comprehensive income | $ | (2) | $ | — | $ | 10 | $ | 15 |
Location and Amount of (Gain) Loss Recognized in Net Income | |||||||||||||||||||||||
13 Weeks Ended
October 31, 2020 |
13 Weeks Ended
November 2, 2019 |
||||||||||||||||||||||
($ in millions) | Cost of goods sold and occupancy expense | Operating expenses | Cost of goods sold and occupancy expense | Operating expenses | |||||||||||||||||||
Total amount of expense line items presented in the Condensed Consolidated Statements of Operations in which the effects of derivatives are recorded | $ | 2,374 | $ | 1,445 | $ | 2,439 | $ | 1,338 | |||||||||||||||
(Gain) loss recognized in net income | |||||||||||||||||||||||
Derivatives designated as cash flow hedges | (2) | — | (9) | — | |||||||||||||||||||
Derivatives not designated as hedging instruments | — | 4 | — | 8 | |||||||||||||||||||
Total (gain) loss recognized in net income | $ | (2) | $ | 4 | $ | (9) | $ | 8 |
Location and Amount of Gain Recognized in Net Income (Loss) | |||||||||||||||||||||||
39 Weeks Ended
October 31, 2020 |
39 Weeks Ended
November 2, 2019 |
||||||||||||||||||||||
($ in millions) | Cost of goods sold and occupancy expense | Operating expenses | Cost of goods sold and occupancy expense | Operating expenses | |||||||||||||||||||
Total amount of expense line items presented in the Condensed Consolidated Statements of Operations in which the effects of derivatives are recorded | $ | 6,339 | $ | 4,033 | $ | 7,250 | $ | 3,640 | |||||||||||||||
Gain recognized in net income (loss) | |||||||||||||||||||||||
Derivatives designated as cash flow hedges | (13) | — | (21) | — | |||||||||||||||||||
Derivative not designated as hedging instruments | — | (7) | — | (4) | |||||||||||||||||||
Total gain recognized in net income (loss) | $ | (13) | $ | (7) | $ | (21) | $ | (4) |
13 Weeks Ended | 39 Weeks Ended | ||||||||||||||||||||||
($ and shares in millions except average per share cost) |
October 31,
2020 |
November 2,
2019 |
October 31,
2020 |
November 2,
2019 |
|||||||||||||||||||
Number of shares repurchased (1) | — | 2.9 | — | 7.5 | |||||||||||||||||||
Total cost | $ | — | $ | 50 | $ | — | $ | 150 | |||||||||||||||
Average per share cost including commissions | $ | — | $ | 17.17 | $ | — | $ | 19.85 |
13 Weeks Ended | 39 Weeks Ended | ||||||||||||||||||||||
(shares in millions) |
October 31,
2020 |
November 2,
2019 |
October 31,
2020 |
November 2,
2019 |
|||||||||||||||||||
Weighted-average number of shares - basic | 374 | 375 | 373 | 377 | |||||||||||||||||||
Common stock equivalents (1) | 6 | 1 | — | 2 | |||||||||||||||||||
Weighted-average number of shares - diluted | 380 | 376 | 373 | 379 |
($ in millions) | Old Navy Global | Gap Global | Banana Republic Global | Other (3) | Total | |||||||||||||||||||||||||||||||||
13 Weeks Ended October 31, 2020 | ||||||||||||||||||||||||||||||||||||||
U.S. (1) | $ | 2,034 | $ | 611 | $ | 323 | $ | 370 | $ | 3,338 | ||||||||||||||||||||||||||||
Canada | 193 | 86 | 39 | 3 | 321 | |||||||||||||||||||||||||||||||||
Europe | — | 115 | 3 | — | 118 | |||||||||||||||||||||||||||||||||
Asia | 1 | 169 | 18 | — | 188 | |||||||||||||||||||||||||||||||||
Other regions | 14 | 12 | 3 | — | 29 | |||||||||||||||||||||||||||||||||
Total | $ | 2,242 | $ | 993 | $ | 386 | $ | 373 | $ | 3,994 |
($ in millions) | Old Navy Global | Gap Global | Banana Republic Global (2) | Other (4) | Total | |||||||||||||||||||||||||||||||||
13 Weeks Ended November 2, 2019 | ||||||||||||||||||||||||||||||||||||||
U.S. (1) | $ | 1,769 | $ | 689 | $ | 532 | $ | 274 | $ | 3,264 | ||||||||||||||||||||||||||||
Canada | 151 | 97 | 55 | 1 | 304 | |||||||||||||||||||||||||||||||||
Europe | — | 128 | 3 | — | 131 | |||||||||||||||||||||||||||||||||
Asia | 9 | 220 | 21 | — | 250 | |||||||||||||||||||||||||||||||||
Other regions | 18 | 24 | 7 | — | 49 | |||||||||||||||||||||||||||||||||
Total | $ | 1,947 | $ | 1,158 | $ | 618 | $ | 275 | $ | 3,998 |
($ in millions) | Old Navy Global | Gap Global | Banana Republic Global | Other (3) | Total | |||||||||||||||||||||||||||||||||
39 Weeks Ended October 31, 2020 | ||||||||||||||||||||||||||||||||||||||
U.S. (1) | $ | 4,709 | $ | 1,395 | $ | 804 | $ | 954 | $ | 7,862 | ||||||||||||||||||||||||||||
Canada | 415 | 183 | 90 | 3 | 691 | |||||||||||||||||||||||||||||||||
Europe | — | 239 | 8 | — | 247 | |||||||||||||||||||||||||||||||||
Asia | 4 | 435 | 44 | — | 483 | |||||||||||||||||||||||||||||||||
Other regions | 33 | 48 | 12 | — | 93 | |||||||||||||||||||||||||||||||||
Total | $ | 5,161 | $ | 2,300 | $ | 958 | $ | 957 | $ | 9,376 |
($ in millions) | Old Navy Global | Gap Global | Banana Republic Global (2) | Other (4) | Total | |||||||||||||||||||||||||||||||||
39 Weeks Ended November 2, 2019 | ||||||||||||||||||||||||||||||||||||||
U.S. (1) | $ | 5,204 | $ | 1,942 | $ | 1,549 | $ | 891 | $ | 9,586 | ||||||||||||||||||||||||||||
Canada | 427 | 251 | 155 | 2 | 835 | |||||||||||||||||||||||||||||||||
Europe | — | 380 | 10 | — | 390 | |||||||||||||||||||||||||||||||||
Asia | 30 | 654 | 70 | — | 754 | |||||||||||||||||||||||||||||||||
Other regions | 57 | 69 | 18 | — | 144 | |||||||||||||||||||||||||||||||||
Total | $ | 5,718 | $ | 3,296 | $ | 1,802 | $ | 893 | $ | 11,709 |
13 Weeks Ended | |||||||||||||||||||||||
October 31,
2020 (1) |
|||||||||||||||||||||||
Old Navy Global | 17 | % | |||||||||||||||||||||
Gap Global | (5) | % | |||||||||||||||||||||
Banana Republic Global | (30) | % | |||||||||||||||||||||
Athleta | 37 | % | |||||||||||||||||||||
The Gap, Inc. | 5 | % |
13 Weeks Ended | |||||||||||||||||||||||
November 2,
2019 |
|||||||||||||||||||||||
Old Navy Global | (4) | % | |||||||||||||||||||||
Gap Global | (7) | % | |||||||||||||||||||||
Banana Republic Global | (3) | % | |||||||||||||||||||||
Athleta | 1 | % | |||||||||||||||||||||
The Gap, Inc. | (4) | % |
February 1, 2020 | 39 Weeks Ended October 31, 2020 | October 31, 2020 | |||||||||||||||||||||||||||
Number of
Store Locations |
Number of
Stores Opened |
Number of
Stores Closed (1) |
Number of
Store Locations |
Square Footage
(in millions) |
|||||||||||||||||||||||||
Old Navy North America | 1,207 | 30 | 12 | 1,225 | 19.7 | ||||||||||||||||||||||||
Old Navy Asia | 17 | — | 17 | — | — | ||||||||||||||||||||||||
Gap North America | 675 | 1 | 92 | 584 | 6.2 | ||||||||||||||||||||||||
Gap Asia | 358 | 11 | 19 | 350 | 3.1 | ||||||||||||||||||||||||
Gap Europe | 137 | 4 | 19 | 122 | 1.0 | ||||||||||||||||||||||||
Banana Republic North America | 541 | 3 | 55 | 489 | 4.1 | ||||||||||||||||||||||||
Banana Republic Asia | 48 | 5 | 5 | 48 | 0.2 | ||||||||||||||||||||||||
Athleta North America | 190 | 10 | 2 | 198 | 0.8 | ||||||||||||||||||||||||
Intermix North America | 33 | — | 1 | 32 | 0.1 | ||||||||||||||||||||||||
Janie and Jack North America | 139 | — | 9 | 130 | 0.3 | ||||||||||||||||||||||||
Company-operated stores total | 3,345 | 64 | 231 | 3,178 | 35.5 | ||||||||||||||||||||||||
Franchise | 574 | 50 | 17 | 607 | N/A | ||||||||||||||||||||||||
Total | 3,919 | 114 | 248 | 3,785 | 35.5 | ||||||||||||||||||||||||
Decrease over prior year | (3.9) | % | (5.3) | % | |||||||||||||||||||||||||
February 2, 2019 | 39 Weeks Ended November 2, 2019 | November 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 | 1,139 | 60 | 2 | 1,197 | 19.4 | ||||||||||||||||||||||||
Old Navy Asia | 15 | 4 | 1 | 18 | 0.2 | ||||||||||||||||||||||||
Gap North America | 758 | 3 | 34 | 727 | 7.5 | ||||||||||||||||||||||||
Gap Asia | 332 | 46 | 27 | 351 | 3.2 | ||||||||||||||||||||||||
Gap Europe | 152 | 3 | 12 | 143 | 1.2 | ||||||||||||||||||||||||
Banana Republic North America | 556 | 8 | 10 | 554 | 4.7 | ||||||||||||||||||||||||
Banana Republic Asia | 45 | 4 | 2 | 47 | 0.2 | ||||||||||||||||||||||||
Athleta North America | 161 | 24 | — | 185 | 0.8 | ||||||||||||||||||||||||
Intermix North America | 36 | — | 1 | 35 | 0.1 | ||||||||||||||||||||||||
Janie and Jack North America (2) | — | — | — | 139 | 0.2 | ||||||||||||||||||||||||
Company-operated stores total | 3,194 | 152 | 89 | 3,396 | 37.5 | ||||||||||||||||||||||||
Franchise | 472 | 94 | 24 | 542 | N/A | ||||||||||||||||||||||||
Total | 3,666 | 246 | 113 | 3,938 | 37.5 | ||||||||||||||||||||||||
Increase over prior year | 6.8 | % | 1.6 | % |
|
13 Weeks Ended | 39 Weeks Ended | |||||||||||||||||||||
($ in millions) |
October 31,
2020 |
November 2,
2019 |
October 31,
2020 |
November 2,
2019 |
|||||||||||||||||||
Cost of goods sold and occupancy expenses | $ | 2,374 | $ | 2,439 | $ | 6,339 | $ | 7,250 | |||||||||||||||
Gross profit | $ | 1,620 | $ | 1,559 | $ | 3,037 | $ | 4,459 | |||||||||||||||
Cost of goods sold and occupancy expenses as a percentage of net sales
|
59.4 | % | 61.0 | % | 67.6 | % | 61.9 | % | |||||||||||||||
Gross margin | 40.6 | % | 39.0 | % | 32.4 | % | 38.1 | % |
|
13 Weeks Ended | 39 Weeks Ended | |||||||||||||||||||||
($ in millions) |
October 31,
2020 |
November 2,
2019 |
October 31,
2020 |
November 2,
2019 |
|||||||||||||||||||
Operating expenses | $ | 1,445 | $ | 1,338 | $ | 4,033 | $ | 3,640 | |||||||||||||||
Operating expenses as a percentage of net sales | 36.2 | % | 33.5 | % | 43.0 | % | 31.1 | % | |||||||||||||||
Operating margin | 4.4 | % | 5.5 | % | (10.6) | % | 7.0 | % |
|
13 Weeks Ended | 39 Weeks Ended | |||||||||||||||||||||
($ in millions) |
October 31,
2020 |
November 2,
2019 |
October 31,
2020 |
November 2,
2019 |
|||||||||||||||||||
Interest expense | $ | 55 | $ | 19 | $ | 132 | $ | 58 |
|
13 Weeks Ended | 39 Weeks Ended | |||||||||||||||||||||
($ in millions) |
October 31,
2020 |
November 2,
2019 |
October 31,
2020 |
November 2,
2019 |
|||||||||||||||||||
Income taxes | $ | 26 | $ | 69 | $ | (280) | $ | 247 | |||||||||||||||
Effective tax rate | 21.5 | % | 33.0 | % | 23.7 | % | 31.6 | % |
($ in millions) | Source of Liquidity | Outstanding Indebtedness | Total Available Liquidity | ||||||||||||||
Cash and cash equivalents (1) | $ | 2,471 | $ | — | $ | 2,471 | |||||||||||
Short-term investments (1) | 178 | — | 178 | ||||||||||||||
2023 Notes | 500 | 500 | — | ||||||||||||||
2025 Notes | 750 | 750 | — | ||||||||||||||
2027 Notes | 1,000 | 1,000 | — | ||||||||||||||
Total | $ | 4,899 | $ | 2,250 | $ | 2,649 |
39 Weeks Ended | |||||||||||
($ in millions) |
October 31,
2020 |
November 2,
2019 |
|||||||||
Net cash provided by operating activities | $ | 399 | $ | 528 | |||||||
Less: Purchases of property and equipment (1) | (288) | (523) | |||||||||
Free cash flow | $ | 111 | $ | 5 |
Scheduled Maturity ($ in millions) | Principal | Interest Rate | Interest Payments | ||||||||||||||
Senior Secured Notes (1) | |||||||||||||||||
May 15, 2023 | $ | 500 | 8.375 | % | Semi-Annual | ||||||||||||
May 15, 2025 | 750 | 8.625 | % | Semi-Annual | |||||||||||||
May 15, 2027 | 1,000 | 8.875 | % | Semi-Annual | |||||||||||||
Total issuance | $ | 2,250 |
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 |
||||||||||||||||||||
Month #1 (August 2 - August 29) | — | $ | — | — | $ | 800 | million | ||||||||||||||||
Month #2 (August 30 - October 3) | — | $ | — | — | $ | 800 | million | ||||||||||||||||
Month #3 (October 4 - October 31) | — | $ | — | — | $ | 800 | million | ||||||||||||||||
Total | — | $ | — | — |
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 | ||||||||||||||||||||||||||||||||||
10.1†
|
Letter Agreement dated March 6, 2020 by and between Sheila Peters and the Registrant | X | ||||||||||||||||||||||||||||||||||||
10.2†
|
Letter Agreement dated March 9, 2020 by and between Shawn Curran and the Registrant | X | ||||||||||||||||||||||||||||||||||||
10.3†
|
Letter Agreement dated October 5, 2020 by and between Nancy Green and the Registrant | X | ||||||||||||||||||||||||||||||||||||
10.4†
|
Amendment, dated November 23, 2020, to the Letter Agreement dated March 9, 2020 by and between Mark Breitbard and the Registrant | X | ||||||||||||||||||||||||||||||||||||
10.5†
|
Amendment, dated November 20, 2020, to the Letter Agreement dated March 9, 2020 by and between Shawn Curran and the Registrant | X | ||||||||||||||||||||||||||||||||||||
10.6†
|
Amendment, dated November 20, 2020, to the Letter Agreement dated October 5, 2020 by and between Nancy Green and the Registrant | X | ||||||||||||||||||||||||||||||||||||
10.7†
|
Amendment, dated November 20, 2020, to the Letter Agreement dated March 10, 2020 by and between Julie Gruber and the Registrant | X | ||||||||||||||||||||||||||||||||||||
10.8†
|
Amendment, dated November 20, 2020, to the Letter Agreement dated March 10, 2020 by and between Katrina O’Connell and the Registrant | X | ||||||||||||||||||||||||||||||||||||
10.9†
|
Amendment, dated November 20, 2020, to the Letter Agreement dated March 6, 2020 by and between Sheila Peters and the Registrant | X | ||||||||||||||||||||||||||||||||||||
Amendment, dated November 23, 2020, to the Letter Agreement dated March 4, 2020 by and between Sonia Syngal and the Registrant | X | |||||||||||||||||||||||||||||||||||||
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) | X | |||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||
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 Quarterly Report on Form 10-Q for the quarter ended October 31, 2020, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss), (iv) the Condensed Consolidated Statements of Stockholders' Equity; (v) the Condensed Consolidated Statements of Cash Flows; and (vi) Notes to Condensed Consolidated Financial Statements | X |
THE GAP, INC. | |||||||||||
Date: | November 25, 2020 | By | /s/ Sonia Syngal | ||||||||
Sonia Syngal | |||||||||||
Chief Executive Officer | |||||||||||
Date: | November 25, 2020 | By | /s/ Katrina O'Connell | ||||||||
Katrina O'Connell | |||||||||||
Executive Vice President and Chief Financial Officer |
Date: | November 25, 2020 | |||||||
/s/ Sonia Syngal | ||||||||
Sonia Syngal | ||||||||
Chief Executive Officer | ||||||||
(Principal Executive Officer) |
Date: | November 25, 2020 | |||||||
/s/ Katrina O'Connell | ||||||||
Katrina O'Connell | ||||||||
Executive Vice President and Chief Financial Officer | ||||||||
(Principal Financial Officer) |
Date: | November 25, 2020 | |||||||
/s/ Sonia Syngal | ||||||||
Sonia Syngal | ||||||||
Chief Executive Officer | ||||||||
(Principal Executive Officer) |
Date: | November 25, 2020 | |||||||
/s/ Katrina O'Connell | ||||||||
Katrina O'Connell | ||||||||
Executive Vice President and Chief Financial Officer | ||||||||
(Principal Financial Officer) |