Gap, Inc. (GPS) Updates on Long-Term Growth Plan into Annual Meeting

As part of its annual investor meeting, Gap Inc. (NYSE: GPS) is providing an overview of its strategic initiatives designed to achieve long-term, profitable growth across its portfolio of brands. The company also will highlight its use of technology, innovation and scale as competitive advantages as it makes progress toward bridging the growing digital world with its physical stores to create world-class shopping experiences for its customers.

“We have the world’s best collection of American brands coupled with a strong economic model and runway for global growth,” said Glenn Murphy, chairman and chief executive officer, Gap Inc. “As the retail landscape evolves, we continue to deliver on our omni-channel roadmap and focus on owning the shopping experience of the future.”

The company will discuss its plans to continue driving online growth by leveraging technology and innovation combined with top talent to deliver new digital capabilities to customers and make further progress in mobile, personalization and loyalty programs.

Building upon its current omni-channel suite – including reserve in store, find in store and ship from store – later this year, the company will be testing its new order in store capability, which allows customers instant access to expanded product offerings online. Further, the company is announcing the expansion of its reserve in store service to all Gap stores in the United States by the end of the second quarter, enabling online and mobile shoppers to now reserve items at more than 1,000 Gap and Banana Republic store locations.

In addition to its industry-leading omni-channel capabilities, the company will reaffirm its intention to fuel growth and gain share in the $1.4 trillion global apparel market. Murphy and company executives will discuss plans to grow through expansion in Asia, as well as in its global outlet, online and franchise channels. The company also is excited about the long-term potential of its fast-growing Athleta brand.

Building on Old Navy’s recent debut in mainland China and Gap’s growing store base in the world’s second largest apparel market, the company will highlight China as its largest growth initiative where it expects sales to reach $1 billion in three years.

Gap Inc. leaders also will discuss progress against its move to a seamless inventory model and a more responsive global supply chain, both designed to fulfill customer demand with increased speed and flexibility, while unlocking revenue and gross margin potential.

“In the next five years, we plan to leverage our scale to drive our strategic initiatives – including global growth plans, omni-channel strategies, a seamless inventory model and fully responsive supply chain. We expect these initiatives to contribute meaningfully to our revenue growth and operating profit,” Murphy added.

As it has the last number of years, the company also will underscore its continued commitment to delivering against long-term financial objectives.

“Our goal is to strike a good balance between growing the top and bottom line, as well as returning excess cash to shareholders,” said Sabrina Simmons, executive vice president and chief financial officer, Gap Inc. “Over the past five years, we have increased revenue $1.6 billion, grown EPS at a 15 percent compound annual growth rate and returned an average of $1.6 billion in cash per year via share buybacks and dividends.”

“We have a strong financial track record and we remain focused in our approach to drive value – by driving revenue growth with healthy merchandise margins and leveraging expenses to expand operating margin, as measured on a full year basis,” Simmons added.

In addition to Murphy and Simmons, the following Gap Inc. leaders are slated to provide updates during today’s meeting (in the following order):

-- Art Peck, President, Growth, Innovation and Digital
-- Sonia Syngal, Executive Vice President, Global Supply Chain
-- Tom Keiser, Executive Vice President, Global Product Operations
-- Jeff Kirwan, President, Greater China
-- Steve Sunnucks, Global President, Gap
-- Jack Calhoun, Global President, Banana Republic
-- Stefan Larsson, Global President, Old Navy

A live webcast is accessible on Gap Inc.’s Financial News and Events page at www.gapinc.com/investors from 10:00 a.m. Pacific Time until about 2:30 p.m. Pacific Time today. In addition, audio of this meeting can be accessed by calling 1-855-5000-GPS or 855-500-0477 for domestic callers and 913-643-0954 for international callers. The conference passcode is 8783693. A replay of this event will be available on www.gapinc.com.

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