Here is a summary of The Gap, Inc.'s Q1 2023 earnings call, which took place on May 25:
- Gap, Inc. is taking actions to improve the trajectory of the business and deliver consistent results.
- The company is simplifying its operating structure and reducing costs while also unlocking its creative muscle and modernizing its core capabilities.
- Old Navy's momentum continued in Q1 with market share gains, improved margins, and a focus on styles with clear fashion points of view.
- The company is actively improving its operating model to unlock creative muscle, heighten accountability, and empower talent by reducing bureaucracy and complexity.
- The company is undergoing significant organizational changes focused on cost reduction and improving efficiency, with a goal of becoming a more informed, faster, and more creative company.
- These changes will result in the elimination of approximately 1,800 positions, representing approximately 25% of headquarters roles, and savings of nearly $550 million on a cumulative basis.
- The company is modernizing its capabilities to build a healthier core and change the trajectory of the business, with a focus on core merchandising processes, customer insights and analytics, and product development processes.
- Adjusted gross margin and adjusted SG&A improved, and the company has taken actions to optimize its operating model and structure to result in expected annualized savings of $300 million.
- For Q2 fiscal 2023, Gap Inc. expects total net sales to be down mid to high-single-digits year-over-year due to uncertain macro and consumer environments, but anticipates gross margin improvement versus last year.
- Gap China represented approximately $60 million of sales last year in Q2 and is expected to be an approximate 1-2% headwind to Gap Inc. for the quarter.
This is an AI generated summary. There may be inaccuracies.
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