Thanks, Bob.
a start before ago, quarter, across with overview the of quarter. specifics of remained product traffic Old the was shared getting an we at weeks into particularly by with along Navy. challenging few soft Old the performance brand, I'll a challenges, As Starting trends continued our with Navy. QX acceptance brand
would face not While around particularly the our we're knowing performance with headwinds we pleased quarter entered traffic. we
traffic has typically as the such with us lag history that discussed throughout shown rebounds we challenging you product quarter remains acceptance quarter. As improvement, traffic last
product and critical we of this we these particularly have Brand a To while product, direct to Officer our to execution, we better believe merchandising. opportunities a as we President. identified regards marketing added have in the that for Creative link new correctly areas end, acts leads diagnosed With issues, two have and areas Chief our role women's
bench learnings Chief until will plans. realized creative next at the Creative strong Officer’s not work vision brand of be year, has hard full from While holiday been into talent likely our QX incorporating
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Regarding marketing, to the know we consumer. had with product frankly become as picture we focus messaging opposed dependent bigger on that too heavily messaging Navy resonates discounting, Old around brand and value on
plans, our messaging Old combined focus Jingle holiday, with winning of For design is Navy's reflective more product stories, Jammies of highlighting puffers our commercial equation. QX, points price value for on recalibrated and we as compelling plaids, ideas big some to such which and
Additionally, partnerships we which and increased include our have investments, strategically marketing exciting new campaigns.
and Harris, test earlier some results most celebrity we led example, this been positive campaign, our have ever we have month, For of campaign. our featuring Neil Holiday the TV iconic seen launched early Patrick from
Navy that season. Netflix's family Navy augmented shop the movie activations, partnership partner for retail bring will inspired to ever Also, is products, movie, this exclusive life holiday reality in-store This Klaus. season Old stores first this in Old for who and the experiences animated includes character those
as by execution acknowledging of terms the the necessary we believe been optimistic holiday, cautiously season the much still we've seeing weather trends are marketing and ahead. of the we in turned, made that we lies and encouraged have remain pivots While
Navy's the to difficult brands, Before in Board acknowledge decision a to and Old China. regards I by want management turn with operations to the made other I
As and investments opportunities continuing the creation the business we've exit the focusing we Navy decision as value continue early The greater by in returns North returns, grow from best see we growth American focus made to invest And to market. to significant. in increase such to strategies, be other digital higher our would proven capability in opportunity on underserved on increasing yield needed XXXX. Old the China that investment
the and U.S. We're acquiring views giving driving for maintained and customers remain loyalty apparel focus access, our nine number the The share we the to fundamental business online category to personalization and strength growth. Navy of growth tremendous the more Our customers of position Old in and market the its two apparel brand new expansion, retailer power has have on number opportunity unchanged. brand the brand as X%, meaning holding and
Through can we to growth forward successful priorities, strategic the to the execution it rates, look of we our know deliver. business returning
the Now Recall the profitability, across year, we promotional inventory move focus quarter sales versus response margin activity. to Similar third product through all customer to XXXX, it's improvement margin quarter, last been channels, assortment primarily positive in Gap, over as continuing case turning on we through rates the it in and product. team indicating saw all last continues saw the to improved year. improvement as year. with rate was in as we QX composition, reduced to improved as consecutive traffic well sequential
margin see first half of were easy, our the were expansion quarter in relatively to compares ahead third expectations. Given continue pleased we the
where and margin quarter women's, this global major first kids fact, In the AUR with quarter expansion, and all positive first product was divisions growth. and delivered the baby men's,
During messaging, certain promotional blanket products. an off online QX, to discount focusing reduced all to on the and more flexible in-stores last of percent opposed we and box versus events both converted all we number promotions to up a year, as on
believe in-store also been what promotional they as the its focused We and the our and reestablishing activity. launch, to to best prior marketing they’re calls, Separately during by confidence supported really has ultimately customers on matter the pricing and transparency Our August. gap of its end Gap’s brand helping towards possible Fall The authority online to that channel at Denim between that closing denim build Now” campaign work price Gap We brand will choose the no came image. strides life with shop, in discussed “It’s made receiving boost overall this
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on improvement focus Going and forward we marketing to the in of continue pockets QX. delivered we process that best can how improvement will leverage
to increasing with eye operating will of We transform continue goal model the the an also dramatically towards GMROI.
results overall QX our disappointing. were Republic, Banana to Moving
to sizes fully brand Our the sub-optimal as sequential quarter. simply comp management well into we particularly as weather, key implement the coming anticipated challenged a related to three were improvements inventory had new Sales works reflect than warmer tool. in that to didn't the product as a minus mix due softness some expected
fashion We invested quickly also sold some and styles. key in over we're items through basic
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consumers we're continuing picture, new to engage with our in ways. Bigger
For customers. valuable insight example, P&L overall following launched business our is already than recently it's planned providing that relevant attracted and larger a for rental our has into
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release. color Before press in I the the movement the provide some to wanted net I slide, within category of some sales sales turn within table other to our around
year, that income with reported recall portion card other sales. the in of changes last You'll now recognition our revenue is a credit
our falls not majority are which changes the sales, card can these reflective the of volatility credit I'm sorry program. brand of sales overall other presentation the net the in within performance category, While cause
want operations. We revenue turn in who disclose strong President program, September. that digital first, is Athleta credit record at of of Beth don't Athleta in-store Sephora was who specifics recently to CEO of most higher Mary brings I and the Beth total to will Laughton, and I background both as and results joined Mary in track a worth was proven welcome card noting year-to-date. it the the now
confident brand that right she $X its upon continues We insights in revenues. and welcome is towards her the billion leader as are the path
for Regarding it QX continues with brand Athleta, be to a tremendous performance growth potential.
share and in market quarter, collections franchise the Powervita, grew we City and performance key like strong Hybrid. maintained During
we some growth comp the see another business at be Our as That continued which largely we the two quickly mix. in-store a quarter. with to associated delivering the start did consistent levers lever, business said, double-digit softness diagnosed in of traffic assortment and quarter, girls being
of how to messaging Regarding has our which in-store invite displayed, for in-store changes this QX. was by marketing product traffic, was we impacted both some we corrected since believe made our been
a and brand refine been increasing drives our online our investments lower brands, traffic. are in-store working awareness to have that and we messaging marketing Athleta’s in Given as still compared to other way both
were two On the there issues. assortment presentation,
in the quarter. were initial which in well, our flows weight, light QX weather at First particularly work warmer more start of the didn't of color Fall forward the and
Additionally, QX at made lifestyle. were mix performance, the which towards assortment the XX% mix appropriate in index expense around up performance rebalance of immediate has over steps in We've our versus total to taken assortment our XX% more historically product to a of QX. the of
in-stores shopping reason customer gifting we're in us as and and October, keep improving an holiday carrying optimistic added to about higher assortment traffic. with the in throughout QX. and shifted momentum weather our season. a sales such about trends our newness flow positive average additional with As coming good insert indicators, give and saw to And we feel improving into We this over transaction
this to end team that brand win continues We've unique high experiential offering line with Looking in and growing product growth openings and us accelerated accelerate year store to inclusive share with stores. touch XX sets retail expect our and and this year, our now focused ahead, market landscape. remains the up our in we to XXX strategy to service competitive positioning, model to around Athleta store believe
we comp for net the guidance of sales flat now in digits prior outlook basis, per for earnings earnings fiscal single $X.XX to versus decline expect of share digits. the digits low mid-single our XXXX, versus of to in to be On reported the to the to Turning year guidance remainder range we sales and low a expect of single decline $X.XX full-year. prior
closures expect the remain to to be million We the costs close be continue store in majority we cost $X.XX. on about to end to completed of about to with million total We XXX to to with cash expect related XXX expected XXXX, be $XXX XXXX and restructuring of about by specialty expenditures. $XXX track the program stores about continue
challenging. around said, our to landlords with discussions be That closures continue
challenges a to investments with continue associated liked fleet, to provide with differentiated challenge. strategy to customers generate on the quickly rationalize must warrant and decisively that would our a specialty stores to necessary Given as don't really experience, those as sufficient be to will continue our our returns execute we simply we the have however
in the of with XXXX, range executing In $X.XX costs to preparing we and expect fiscal associated $X.XX. for separation be to the
evolve, continue and provide work information to we’ll context. the As additional
tax We've of Excluding quarter well with quarter reform revision to we separation, executing gross and the earnings ago. first questions the full-year range building trends. gain on margin $X.XX. second weeks few the to and as any regards expect With to deleverage the year-to-date margin, to roughly per $X.XX in provided adjusted gross of now a expect line in be guidance sale adjustments, the had we a on costs be impacts as associated with costs some we the preparing related restructuring share tax
our in the some call embedded provide would we fourth entering additional Old an XXXX at trends with of assumption August context, quarter the momentum. during in guidance we gave Navy fiscal inflection that QX a the and to particularly Just bit be
Given that not to a we reflect we for hoped see we prudent. did inflection was guidance trends felt the to current our that had better materialize, reduction
on focused important heading execution with momentum season Of organization ending our XXXX. holiday with and improved the over pleased outlook, course, remains not however updated we're the into
previously capability above planned due per in our was process. fleet restructuring, the our to were per $X.XX, our turning guidance our earlier range excluding separation, Now associated adjusted $X.XX, specialty performance. closing earnings On share financial to share $X.XX reported a quarter third costs basis, timing announced and with earnings
the key partially as $X store quarter Regarding and non-comp be sales last Navy down metrics, closures. at Gap the store for X% sales year. down new flat last by to Janie with quarter compared year. net Comp sales as well were billion continues Athleta other were driven Old by largely Jack X% to openings and offset of Rest
release. As sales are division by in saw the total our you accounts press
first Third an XX down trends. points quarter basis from gross margin improvement half XX% to was
was expectations, Navy composition expected. with better margin line different, worse performing than Old performing gross in was and with Gap slightly our While the
Navy primarily margin Athleta. primarily Gap Republic basis by brand Old driven was net lower by and Merchandise XX partially down points Rent and driven by occupancy deleveraged basis and XX offset Banana points, sales.
deleveraged SG&A relating expenses Regarding quarter SG&A basis on $X.X sales sales as as reported as of well a net third basis, increased expenses billion. our costs total fleet and again were percentage When to restructuring, reflecting primarily technology excluding operating with investments. separation points planned XX associated a lower
XX% the to rate in to charges, now rate impacts We effective excluding interest, rate third our reported non-cash tax lower. the and restructuring XX%. points taxes the was tax tax effective was two about related to be adjusted tax expect full-year Moving quarter, our about
liability fiscal and certain tax non-cash related current year to our expected XX%. to be XXXX Excluding our effective continue adjustments for guidance tax we rate tax full-year to year to XXXX expect charges, about restructuring impacts tax reform
inventory X% Regarding inventory, quarter we ended up to last the with year. compared
of store impact we our guidance, previous overall openings Jack to closures productivity. tariffs, and Janie in work down net the acquisition, store continue of around Excluding with inventory inventory improving about as the X% line was and
inventory in to half, core traffic While back the there's opportunity trends. our more particularly in buys given eliminate in better we've conservative more been waste the buying capabilities leverage challenging our processes, to
which are up way to overall demand will gross we and the margin Channel inventory to working We're open performance. improve open said time profile. this localizing based nimble back on the Brands holding our in and us we our as more in improve return September, to pushing the capital Also, to yield, time expected and react ourselves continues and assortment is on over keep less on buy to more allow over trends front and product allocations business end. more be increase work
to transit that inventory decrease this fluctuations continue expect cause We could in to point levels QX, noting in while metric. in in time
cash Turning cash, line We to $X.X expenditures $X separation approximately were to year-to-date year. was ended related flow, $X.X and flow including of last with billion investments the Year-to-date, $XX capital. $X of our $XX billion $XXX target free million, billion. million, cash of over decrease cash short-term with historical million million in of a quarter equivalents capital
We $XXX to Distribution Athleta facilitate capital be separation. of and and investing investments related We're growth up separation in capital expenditure priorities of for comprised Old build-out include separation building This is technology companies future profitable million. capital million million expenditures related $XXX the of Navy to about position XXXX supply $XXX near our logistics, capital million to of opportunities to XXXX a of that sustainable $XXX costs planned expect one guidance the fiscal of our needed capital to continuing and with now expansion at chain focused base primarily Ohio prudently initiatives related growth, Center. and technology and to each of of and investment and headquarters
around changed. not to shareholders philosophy overall returning has cash Our
In and during dividends Year-to-date, quarter repurchases our addition additional expect we well. the in of million the we third completed million approximately paid dividends, share of fourth an million. we $XXX quarter to as quarterly $XX to $XX repurchase
net XXX and Navy year-to-date, Jack count, and a added locations. Janie store acquired on XX we Regarding stores Old basis and Athleta
for with completed as of we At company We the in We China. opportunistic year ended now closed the openings operated openings store America, primarily outlets expect Asia. quarter brand, in of XX Gap stores. X,XXX pace and accelerate XX closures Gap in we openings net in of some net Athleta the primarily stores North
for she up also the team, be but a our open this know company moving your has she'll laughter everything role, be I outside her want to gratitude the to of quick past the Romani, already of great for Relations of behalf express will Inc. missed. the and or Tina Investor questions, done brought to Gap, seven On for her everything over years, ability that technical she's of call entire Head you new many opportunity Before I on
Relations. over assuming to like over, who role. as is a months working Head and She Investor investor please opportunity out analyst, with name forward. a joined of Please of congratulating to reach decade Katina Tina going of and IR this recently more on the start. I'd and communications Gap, off in ago primarily to great stumble Metzidakis, a both Katina whose will join side welcome experience any the in closely take sell be always them to and has me Inc. Katina team I three
close So let by me reiterating Bob's comments.
of appropriate view approve to forward. We brands urgency path and have clarity clear the where about need a our and
conviction With Our questions. remains for it open opportunities that, strong. will we on the up
