Hello, welcome to the dbAccess Global Consumer Conference. I am Paul Trussell, the U.S. retail analyst, and I'm very pleased to be hosting Gap's management team for a fireside chat today. We have with us CEO Sonia Syngal, as well as CFO Katrina O'Connell. Sonia and Katrina started their positions in March of 2020, a very unique time to start your current roles. Quite the timing. Sonia previously led Old Navy, taking substantial market share during her tenure, and also served in global supply chain and international roles. Katrina has also been CFO, like I mentioned, since March of 2020, but has 25 years experience overall at Gap Inc., including Old Navy CFO and Head of Strategy and Innovation. It's a pleasure to welcome you both to this virtual conference. Let's start off about what's been going on this past year, which is certainly quite a bit.
Sonia, I'm going to turn it over to you to maybe kick off for some introductory comments.
Great. Thank you, Paul. Hi, everybody. We're pleased to be here today and talk about this incredible company, Gap Inc. It was founded in 1969. The 52-year-old company was originated through Don and Doris Fisher, a partnership based on equality. They each put in $21,000 of their respective money to found the company. Here we stand today now as the leading apparel fashion business in America at roughly $17 billion of sales prior to COVID. We cover, through our reach, about 80% of the market. We have these four iconic brands, Gap, which was the founding brand, Banana Republic, which originated as the upcycle brand in the 1970s, Old Navy, which was founded as a brand that was intended to provide democracy of style to all families, and is now approaching $10 billion in sales.
Our most recent and fastest growing brand, Athleta, which is targeted at the athletics market and the activewear market, and it's a brand that is for women, by women. These four iconic American brands are such a honor for Katrina and I to lead, and as Paul mentioned, she and I stepped into the role, I think two days before COVID hit in the U.S., it was quite a start. In that moment, we had a lot of clarity. Having both been insiders, having grown portions of the business over our tenure in a variety of roles, we were able to hit the ground running. As such, articulated our strategy and announced it to investors a few months later. We call this the Power Plan 2023. It's a very simple strategy. It's seven words. We grow purpose-led billion-dollar lifestyle brands.
These are all iconic American brands. Enabling this North Star is our incredible platform, which is a platform comprised of a technology stack and scaled operations. The power of our portfolio, which is these four brands that range from a $12 AUR for Old Navy, Average Unit Retail price for Old Navy, to $20 for Gap, $35 for Banana Republic, and north of $50 for Athleta, let us cover the entire spectrum of apparel. Our long-term financial targets are to deliver low to mid-single digit annual sales growth and with a 10% + EBIT margin, and we have an operating cash flow of about 10%. We're very pleased to have just come off of our Q1 results and also our 2021 outlook, which we were able to raise.
We raised our outlook for sales, for operating margins, strong cash flow, and returning cash to shareholders through dividends. With that, hopefully that gives you a brief view into this incredible company, and happy now to take any questions you might have, Paul.
Great. In terms of today's format for the audience, I do have a list of questions that I will be looking to get through, but I do encourage you and invite you to use the chat and to input any questions and answers. We will certainly take some time to go to the audience questions. To start off, what are some of the biggest changes that have been made at the company over the past year? What should investors know about your top priorities going forward? There's already been quite a number of changes. What should we be looking forward to?
Yeah, listen, we focused on five main priorities. First being our new strategy, our Power Plan, which is the power of our brands, the power of our platform, and the power of our portfolio. The second priority was a new culture. We aimed to establish a performance culture. We did a lot of work around that. We set much higher expectations for ourselves and for the organization. The third are key management positions. We brought in a new head of technology, a new head of real estate, a new head of growth, and a new head of Banana Republic. All have been leaders that helped us accelerate. I have three criteria for any new leader and any existing leader. The first is a proven track record. The second was a leader that was team first versus ego. The third was wanting to create enduring value.
Management was the third. The fourth is playing offense. We are playing to win and to grow, and to grow top and bottom line, as opposed to be a flat business, garnering bottom line. The fifth is dealing with the hard work that was necessary to set this company up for the next chapter. The restructuring work, whether it was the real estate or the review of some of our international markets. These are a couple of examples of doing the hard work that was necessary for today's retail environment.
Absolutely. As you just mentioned, certainly already off to a good start, and you were able to raise your guidance with the recent Q1 results. Maybe turning to Katrina, could you just touch on your ability to raise those margin goals and maybe talk also bigger picture around the multi-year plan around margin opportunity?
Yeah, Paul, of course, happy to discuss that because our primary goal, as Sonia said, is to drive profitable sales growth here at the company. We laid out in our plan back in October that we are going to do the hard work, as Sonia said, to restructure the trapped fixed cost in the business, while also investing in demand generation to grow the business. What we said is that while we ended 2019 at about a 6% operating margin, we have put in place the plans to get to about 10% by 2023. This year, as you know, 2020 with COVID, everyone took a step back in COVID. This year, we guided to originally hitting about a 5% operating margin as we recovered from the pandemic.
Based on the strength of our first quarter results and how much we've been able to get done in our restructuring program, we actually were able to take up that operating margin guidance to about 6% for this year in order to be well on our path to accelerating towards that 10% operating margin. A couple of thoughts on that. First, we are seeing year-over-year sales growth versus 2019, which was great to see. We grew our sales 8% in the first quarter, driven by strength at Old Navy and Athleta, but also importantly, the return of Healthy and Cool to our Gap brand, where North America, we were able to drive a 9% comp here domestically, and then our Banana Republic business recovering. We were able to do that while expanding our merchandise margins, which is exciting.
Because we are closing a significant number of North America stores, we closed 225 Gap and Banana stores in 2020, and we intend to close another 75. We were able to get about 430 basis points of raw expansion, which really helped drive operating margins up in the quarter. Lastly, we are investing in marketing. Sonia and I believe that investing in market share growth is important. Our brands need to be healthy and competitive in order to gain market share and customers. While we restructure the company, we are also investing in demand generation. We were able to expand our operating margin versus 2019 in Q1. Again, that gives us confidence that we can get back to about a 6% for this year. We have lots in play for our 10% operating margin goal for 2023.
Absolutely. Thank you. Very helpful. Obviously, inventory management has been a key focus. Sonia, how are you balancing the assortment as you move through the recovery, and have you started to pivot away from casual, cozy loungewear? How do you think about planning for categories going forward? Particularly, what's your ability to chase if needed?
Yeah, thanks, Paul. One of the biggest muscles that we developed last year through the pandemic was speed and agility. A great example of that is our mask business. We went from recognizing a new must-have item and creating a $400 million business pretty much overnight. We went from design to in our customers' hands in less than six weeks as one example. Through that speed, one of the things that we have obsessed about is that our customers will tell us. Our customers will tell us, and we will be there ready to respond. What we're seeing now, what our customers are telling us now is that it's the power of the and. She is wanting cozy and casual as well as the confidence. She is wanting to stay in and go out. It's this example of the power of the and.
She's wanting to shop digital and in stores. This is what we are observing out from the customers, and we're seeing the emergence of pre-COVID occasion wear at Banana Republic, whether it's high stakes occasion or going out occasions. She's also wanting to come home and put on her cozy sweatpants and go work out in her active wear. It's an exciting time. People are looking to express their personal style and also have a range of items that suit their needs now as our families emerge from COVID.
Excellent. Let's walk through the brands. How are you positioning Gap going forward? Please give us some insights into some exciting things on the comm, including a partnership announced with Walmart for Gap Home. Also would love to hear any color on Yeezy, which I think we're all anxiously awaiting.
Listen, I've always said that Gap is one of the most iconic brands in the world and arguably the most iconic American apparel brand. Yet we had lost our obsession about creative and cool. Over the last 15 months, the team's been hard at it, and I give them a lot of credit, which has put position Gap where it rightfully belongs. As a result, we've seen that North America is growing, it's healthy, and it's cool. What that lets us do now is export that brand around the world. We sell in over 50 countries. Gap is globally recognized. That is the opportunity for Gap. At its core now, we're building from a place of strength.
The strategic closure plan of shedding real estate that was no longer relevant, digital dominance, and being digitally led, e-commerce led, is proving to be very successful. For 52 years, we had monetized the brand in a very narrow way. We said, "Oh, we're going to sell products in stores." 20 years ago, we said, "Oh, we're going to sell products in stores and online." Now what we've said is the brand is the asset, and we're going to come up with new and relevant ways through partnerships as well to amplify the reach of the brand. When you think about the Walmart deal, which is about expanding Gap's authority into lifestyle brands through the home collection or the Yeezy Gap collaboration, which is due to come out, and I think be one of the most anticipated apparel collaborations out there.
Those are a couple of examples of how we're breathing a lot of life into Gap. We're seeing the customers respond. The youth engagement in the brand is very high. The amount of logo we're seeing in TikTok and in the youth culture is growing really fast here and around the world. We're pleased with the momentum and pleased what these collaborations will do for us.
Absolutely. Very exciting. Old Navy, near and dear to both of your heart, representing over 50% of the company's revenues. Obviously, a very successful brand for quite some time. What do you really attribute its success to, and how can this brand sustain that momentum going forward?
Old Navy is a unique brand, and as it's approaching its first $10 billion, as I like to say, it's a pretty young brand. Founded in 1994 on a simple premise, that democracy of style, all about fun, fashion, family, and value. Really the momentum we're seeing is due to the excellence at the core. The product is truly differentiated, and you're seeing premium product at great value, great fit, style, quality, and price that our customer is responding to for the whole family. You're seeing a very broad use occasion. Whether it's active, which is their fastest-growing segment, active and sleep, or it's the dresses and the shorts and T-shirts that are relevant today with a seasonal change, Old Navy is delivering on all cylinders for their respective product.
The way you maintain the momentum, then of course, worth mentioning the experience, which is a physical experience with 1,300 stores that are large, I think it's a unique physical experience as you go into an Old Navy, coupled with their digital experience. A profitable e-commerce that is very profitable in the value space is something the team has built over 21 years. All of that is what's driving Old Navy's momentum. Now add to that category extension. With the launch of intimates that just happened, which has already put Old Navy in the top 20 intimates providers in the U.S. with a very soft launch. The upcoming body positivity and body inclusivity launch for the fall that we anticipate taking extended sizes to all of our stores, we think that's going to be very big as well.
Product extensions, digital dominance and investment, the experience being highly successful and aspirational, that's what's driving Old Navy's momentum, and we expect it to continue.
Absolutely. I have to ask about Athleta. I mean, growth has been phenomenal.
Thank you.
Discuss how you have separated from the pack and really carved out your own lane for this brand. You've also made some unique announcements and partnerships here as well. One of my favorite athletes, Simone Biles. Can you tell us about that and what does her being associated with this brand, what does that mean for you guys?
It's a very crowded space, the active space. I'd say where Athleta is uniquely positioned and has ownable authority is that it's a brand designed by women for women. We only offer women's and girls' products. It is a community that it seeks to.
A brand that seeks to engage with its customers in a very wholesome way, in a holistic way. I think that's where customers are responding. It's the fastest-growing brand in the portfolio. I think north of 50% growth in Q1, and blew past $1 billion last year. The recent partnership with Simone Biles, I think is fantastic. It's going to raise Athleta's brand awareness, which sits at below 30% only. It shows you the runway ahead. We were able to engage with Simone because she got the brand, and she wants to be a part of what is special about Athleta. I know if you saw her last night at the World Championships for gymnastics in America, she did so well, and she's the perfect ambassador for us. We'll support her as well as she aims to disrupt the gymnastics world.
A great example of where Athleta has really built strong communities. Of course, enabled no matter the product experience is special or differentiated. If you walk into an Athleta store or if you go on the website, what you'll see is that it speaks to all women. Every body is welcoming and appreciated. That is, I think, what our customers are responding to, and the product is just fantastic.
That's great, and we definitely look forward to seeing her continue to perform and bring in some gold medals. Katrina, tell us how you think about that balancing act around making investments into these brands, into technology and innovation versus that flow-through and showcase and improve profitability for shareholders. Also, as we think about capital allocation, what are your priorities for the cash? As we think about paying down debt, dividends, buybacks, and M&A.
Yeah, Paul. First of all, when it comes to investments in the business versus operating margin expansion, what I would say is it's an and. We're doing two things in the business. Step one is we are driving down the fixed operating costs in the business. That's going to come through the North America store closures that we're doing, which will pull out unprofitable sales. It'll pull out rent and occupancy costs. It'll pull out store expenses and allow us to actually have costs in the business that are really driving revenue and profit. In addition to that, we're going to be setting up a process where we're focused on digitizing the operations of the company so that we can further drive down the operating costs in the company.
That's critical to me and Sonia, is to get the fat out of the system that is not driving profit, but instead is just trapping costs. We also believe that it's critical that our four purpose-driven lifestyle brands have the investment they need to be able to acquire customers. Whether that's in the form of partnerships or whether it's the launch of our loyalty program, we're actually launching our first multi-tender loyalty program in July. Which is hard to believe for a company our size that we have a robust credit card program, but we don't have an integrated loyalty program, and we know the value that can create for customers by driving frequency and average transaction. In addition to that, we're investing in the digital capabilities. As Sonia said, we're digitally dominant. We've been able to close to double the business.
Our digital business is over $6 billion in sales, the number two apparel U.S. e-commerce business. It's truly a competitive advantage. Investments in all those allow us to compete to win. Our balance is about driving the virtuous cycle to grow sales profitably through driving down fixed costs and investing in demand generation. On the capital side, again, one thing Sonia and I are doing is ensuring that our capital is really focused on ROIC. Historically, capital has been in the 4% of sales range, which is fine, but it's really been focused more on international sales growth as well as store sales growth, none of which has returned in the way that we see fit.
As we look to partner international businesses and close stores, we're pivoting our CapEx into demand-driving customer loyalty, technology, and digital, those types of investments that we think will drive higher returns. Our order of operations when it comes to cash flow and investing in the business is first we'll invest somewhere around 5% of sales in CapEx to the degree we can get good returns. We just reinstituted our dividends, which we're happy to get back to. It's been a large part of our returning cash to shareholders. We're doing a modest share repurchase program. We don't do much of it, but enough to offset dilution.
Of course, as you mentioned, Paul, back during the crisis last year, we did go out and tap the liquidity markets to ensure we had the cash not only to navigate the crisis but to lean into really winning and accelerating the business. That said, we are going to look to eventually restructure that debt to get down to a much better capital structure for the company. Right now, the bonds are trading at a premium, and so it doesn't make economic sense, but we are close to that and really have a high commitment to getting back to the capital structure that long-term we think benefits the company.
Absolutely. Maybe to follow up on that of you would be maybe talk a little bit more around the evolution of the role of the store. As your digital business grows robustly, how should we think about the impact that has to the company's profitability?
Look, I think stores matter and e-commerce matters. What we are uniquely positioned to have is dominance because of the intersection of both, and the fact that the customers shop back and forth, and are most valuable with the longest, or the biggest lifetime value are those customers. The customers that shop online, shop in stores, and are part of our loyalty program. We're maniacally focused on expanding that cohort, those loyalists. What I would say around stores is, the experience matters. Customers are not going to come to stores if they're in bad real estate that is declining, or if the store experience itself isn't inspiring. We've been on a march to ensure that for all of our brands, our stores are relevant. Gap, for example, has completed more than half remodels in North America.
Now when you walk into a Gap store, it's light, it's bright, it's happy. Old Navy as well is on a remodel path. Banana Republic is a good high-quality set of stores, but also is going through a light refresh. Athleta is a fairly new fleet. Yet what you'll see in Athleta is a mannequin platform in a physical environment that really stands out in the sector. I would say that we're quite intentional about our stores and the technology enablement of our stores connected to our digital self. We know that the customer starts her journey largely on a phone, and then finds her way through the various paths that she chooses, whether it's buying online, picking up in store, whether it's trying on in our store, whether it's shopping online at her convenience, whether it's virtual styling, which is a new capability we've offered.
Our whole objective is that our customers can engage with these brands however it suits them, and we will be ready with that.
Great.
Paul, on the profitability of online. Sorry.
No, it's okay.
On the profitability of online, what I would say is. There's a lag. On the profitability for online, what I would say is that, as Sonia has said during this call, the good news is that online has been an and for us. As our stores have reopened here in the U.S. in particular, we're seeing our digital dominance continue, and customers really shop both channels, as Sonia said. We are getting that nice intersection of a multi-channel experience for our customers, and we're using our competitive advantage of our leveraged supply chain in order to be able to drive an efficient cost structure associated with those digital sales.
Perfect. Thank you. At this time, I would like to invite the audience to use the question and answer box to go ahead and type in any topics that you would like to follow up on, and we'll be happy to get to that. In the meantime, I do want to ask about the loyalty program. What's new? What's different? You've also kind of announced a new partner for the credit card program. Why did you decide to make this change?
Yeah. Our head of technology and digital has a lot of experience in the space, we took the opportunity to truly assess the market and decided to go with Barclays and Mastercard. There's a lot of alignment there. We will be beginning in May 2022 with them. Barclays technology investments suit our technology investments, and we think that the customer centricity around solutions is where we'll see differentiation. They're going to be the exclusive issuer for our co-branded cards and for the PLCC program. What was going to be different about our program, first of all, we have 188 million known customers and 62 million active customers. The potential reach for this loyalty program is massive. What we'll offer to those customers is enhanced rewards that have to do with a whole host of services and needs that we know our customers are looking for.
I think that historically, we've had a separate multi-tender loyalty and card program. Now to have them be integrated is going to be very exciting. We know, this is not rocket science. This is a proven enhancement to business of our scale. We're excited about what's going to come, and for it to be tender agnostic, for it to integrate with options like Afterpay and PayPal, which now already are about 20% of our e-commerce business. It's all about, again, that personalized experience with our brands served out through this MTL program. We're excited about It's one of our top initiatives this year, soon to come in a couple of months.
Just from a thematic standpoint, there's been a shift, and there's a lot of conversation around denim cycle now. Is this something that you have seen, and what would you say from the standpoint of silhouettes that are really resonating with the customer today?
We have a lot of authority in denim. The company started because our founder couldn't find a pair of jeans that fit him. It's near and dear to our heart, and we're the number one denim brand between Old Navy and Gap. For our kids business and a growing market share business in the adult space as well. What we're seeing is that certainly leg shapes have changed, and two years ago, what was 90% a skinny silhouette has shifted to more like 50%. We're seeing a lot more fashion, a lot more range, whether it's boyfriend or straight or wide leg. I think people are expressing high rise or ultra-high rise. The leg shape has changed, and the rise has changed. Oh, by the way, when that happens, Paul, that halos to the top business.
We're seeing the outfit completely changing, and denim cycles happen like this, I'd say once a decade. The last big one was maybe a colored denim cycle around 2010, 2011. It's a really big deal for us. If you couple that fashion shift with our dominance and knowledge on comfort, we think that's where we win. Whether it's the four-way stretch or the contour waistband or solving for a great fit for every body shape, from double zero to 3X or 4XL, that is really where our sweet spot is. Excited for this, excited what we're seeing. We're seeing the market share gains in the last six months, and we expect that again to continue. Particularly with everyone's body having changed a little bit during COVID. There were the maniacal exercisers, and then there were the not so maniacal exercisers, and kids have grown.
Everyone's body has changed, and everyone's buying what they care to. It's critically approached the all-important fall fashion season.
Indeed. Certainly, we're obviously getting out and about a little bit more of late and a lot of returning to work and weddings and everything coming up. Maybe just talk about how you're positioning Banana Republic going forward and what investors really should know about the priorities and goals of that brand.
Banana Republic before COVID hit, Paul, was a very nice multi-billion dollar profitable, highly profitable business and growing. COVID hit, right? Particularly in North America, a very big impact as people stayed inside and the need for wear-to-work or high occasion wear was in the back burner, as well as the [skinny] impact especially. What we're seeing now, though, is a very nice re-engagement and starting with spring. We did introduce the BR Sport line and a comfort line and the intimates lines, which helped drive sales during COVID, and we expect those lines to continue. In addition, the re-embrace of wear to work, of structured pants, of high occasion dresses, all of those are coming back. Couple that with some of the excitements that Banana Republic is offering.
They did a collaboration with Curry as an example, that sold out in less than a week. They've been very creative with their store experience and their windows and have stopped traffic in New York City with that. The team is getting their energy and momentum, and we're excited to see what's coming.
We have a question here from the audience. It's inquiring about the pace of recovery in Europe and what you're seeing there versus the U.S. Any particular category that stand out that may be resonating with one consumer versus the other? Since we are on this topic, maybe this would be a good time as well to maybe just touch on your strategic review overall of the European business.
Yeah. I mean, I think that the benefit of having our business 88% sales in the U.S., with another 7% in Canada, is that our international businesses today have been relatively small and therefore low impact on the sales recovery. Europe has lagged store openings from the U.S. by about a year. The U.S. stores reopened late May. We're now, just now, I think a few weeks ago, saw all of our European stores open. That being said, our e-commerce business has been strong in Europe as well as our partnership with Zalando, et cetera, where we sell. In terms of product preference, I'd say that global style is global style, youthful energy and youthful preference is the same. I see young kids wearing Gap logo as they're heading back to school in France.
There's a lot of love for Gap brand in particular, which is so iconic. In the U.K., we have in John Lewis, Athleta and Banana Republic, and it's doing very well with these. As we think about partner to amplify, that gives us confidence to leverage what we know is a good business opportunity for us in Europe and in Asia through the right partners. Our strategic review is ongoing. As you know, we're in four markets in Europe, and due to COVID and different regulations by country, it's just taking a little bit of time. We're on track for this year to complete that and to find the right way to leverage the right approach to capitalizing on these iconic brands in Europe.
Great. ESG is certainly a topic, top of mind for many. What would you like investors to know that Gap Inc. is doing on this front?
We take this very seriously, and from our founders, there was always a saying in the company, which is, we do more than sell clothes. Our values have been very much the driving force for the company from the beginning. We're proud of all of our firsts. We were the first Fortune 500 company to be validated as equal pay for the men and women, in every level, in every job code, and in every country, as an example. This last quarter, in Q1, we were the first company to require all of our suppliers to pay their workers electronically, which we know is 2.5 million workers, which we know is a critical path to financial freedom in the value chain. These are examples of where we've been proud to be first.
Fortune" magazine cited us as one of the top five companies in terms of diversity in America. Whether it's the environment, which we play a leading role in, often we're in the top 10 list of the most sustainable companies. As you may know, we joined The Fashion Pact as a founding member. The Fashion Pact is a primarily European coalition across companies that is focused on minimizing the impact of fashion on the planet. We're proud to be a founding member. We're proud to be working with those goals to reduce plastic, to reduce water consumption, and in fact, year-over-year, we reduced our virgin plastic usage by about 11%. We expect that to continue with some of our recent announcements, such as Old Navy eliminating plastic bags by 2023.
The work never ends on the ESG front, whether it's around equality and inclusivity, which is the North Star of the company. Our North Star is that we are inclusive by design. Diversity and inclusion is big. Impact in our communities is big. Impact on the planet is something that is top of mind for us. We think that a big part of why people buy clothing is to show off their personal style and also represent their values. We think those things are synonymous. We aim to have those go hand in hand, whether it's the 100% organic collection for Gap Teen's launch that they did last year, that all that product is 100% organic. We know how important that is to teens. Whether it's the fact that our Old Navy stores employ underserved youth in America.
We're a big driver of enabling the Boys & Girls Club youth to work in our stores. These are examples that we do because it's the right thing to do, but we also know they matter to our customers.
Thank you for that. Maybe staying on the investor front, and we can use this question to close. Maybe Sonia and Katrina, if you want to chime in on this. What should investors really know and understand about Gap Inc. today? What is it that they should really be spending time to focus on to better understand this new business model, this new set of priorities, and how you are driving this business to a new long range in terms of your targets and goals?
Katrina, do you want to start, and I can finish up?
Yeah, I'm happy to start. I think what Sonia and I are focused on, which I hope you've heard today, is a maniacal focus on growing our four purpose-driven lifestyle brands, but with a focus on profitability that allows us to continue to balance top-line growth as well as EBIT margin expansion. That's going to come from what we've talked about today, which is just the need to restructure the fixed cost in this company, but also really invest in what matters to our customers and our brands. We are committed to that. As we said, we've laid out a path to low single-digit sales growth over the next few years while expanding our EBIT margins to 10%. Our ability to raise guidance this year accelerates our path towards that, and our brands are competing well and gaining market share.
We feel like the proof points have begun, and we're on our path to hitting this business model that we feel quite good about.
Katrina couldn't have said it any better. Look, we have an enviable portfolio of iconic American brands. We're the largest player in America, scale and operations and technology is a huge advantage and bigger advantage than it's ever been. We're playing to win with an emphasis on a culture of performance and a priority on execution and a passion for this business. Katrina and I are both insiders, we stayed, we're drivers of this thing. We have passion for the long-term value of this company. I'd say that's what I would leave you with. I wake up every day excited to, I think, run to work and see what we can make happen. There's a lot of excitement every day in what is unfolding within this great, iconic American company.
Well, great. We will leave it there. Thank you so much for your time, Sonia and Katrina. This will conclude our fireside chat with Gap Inc. Thank you, everyone.
Thanks, Paul.