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Good afternoon, ladies and gentlemen. I would like to welcome everyone to The Gap, Inc. Third Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. For those analysts who wish to participate in the question and answer, press star one to enter the Q&A queue. As a reminder, please limit your questions to one per participant. If anyone should require assistance during the call, I would now like to introduce your host, Whitney Notaro, head of investor relations. Good afternoon, everyone. Welcome to The Gap, Inc.'s third quarter fiscal 2025 earnings conference call. Before we begin, I'd like to remind you that the information made available on this conference call contains forward-looking statements that are subject to risks that could cause our actual results to be materially different. For information on factors that could cause our actual results to differ materially from any forward-looking statements, please refer to the cautionary statements contained in our latest earnings release. The risk factors described in the company's annual report on Form 10-K filed with the Securities and Exchange Commission on 03/18/2025, reports on Form 10-Q filed with the Securities and Exchange Commission on 05/30/2025, and 08/29/2025, and other filings with the Securities and Exchange Commission. All of which are available on gapinc.com. These forward-looking statements are based on information as of today, 11/20/2025, and we assume no obligation to publicly update or revise our forward-looking statements. Our latest earnings release and the accompanying materials available on gapinc.com also include descriptions and reconciliations of financial measures not consistent with generally accepted accounting principles. All market share data referenced today will be from Surcana's U.S. Apparel Consumer Service for the twelve months ending October 2025 unless otherwise stated. Joining me on the call today are Chief Executive Officer, Richard Dickson, and Chief Financial Officer, Katrina O'Connell. With that, I'll turn the call over to Richard.
Thanks, Whitney, and good afternoon, everyone. We are very pleased to report third quarter results for The Gap, Inc. that exceeded our expectations across multiple measures, including net sales, gross margin, and operating margin. We've done this by executing our strategic priorities with precision and consistency. The reinvigoration of our iconic brands continues to gain strength. Our playbook, rooted in purpose, powered by creativity, and executed with excellence, is working. And it's bringing consistency to how we operate and clarity to how we win. The momentum in the business is clear. From product design to storytelling. From store execution to digital engagement, the result is a company that's becoming more agile and performing with increasing confidence. On today's call, as usual, I'll provide an update on our third quarter performance and progress in the context of our four strategic priorities. Then Katrina will walk you through our detailed financial results and our financial outlook, after which we will open the call for questions. Let's start with financial and operational rigor. The Gap, Inc. comparable sales were up 5% versus last year. The highest quarterly comp in over four years. We were pleased to see our three largest brands Old Navy, Gap, and Banana Republic posting strong positive comps in the third quarter, demonstrating the resilience of our portfolio despite a challenging quarter for Athleta. We delivered an operating margin of 8.5%, which benefited from growth in AUR as customers responded well to our brand offerings. We continued to strengthen our balance sheet, ending the quarter with strong cash balances of approximately $2.5 billion. Turning to our next strategic priority, driving relevance and revenue by executing on our brand reinvigoration playbook. This playbook, when applied with relentless repetition, creates a powerful flywheel that has resulted in seven consecutive quarters of comp growth for our portfolio. Our largest brand, Old Navy, had an incredibly strong quarter. Reflecting the brand's strength, consistency, and continued momentum. Comparable sales were up 6% with the brand gaining market share over the last two years. Customers responded to the compelling value proposition resulting in healthy growth in average unit retail and notably across all income cohorts. Which is encouraging despite widely reported macroeconomic pressure on the low-income consumer. Old Navy's consistent performance is being delivered by trend-right products, our strategic pursuit of category leadership, and compelling storytelling. The quarter began with a robust back-to-school season, reinforcing its leadership position in kids and baby in the U.S. Denim posted its highest third-quarter volume in years, with growth across the family. Women's and girls showed particular strength driven by trend-right styles like barrel, wide leg, and baggy fits. Active delivered impressive double-digit growth in the quarter with strength across the family. This demonstrates the strong customer response to the brand's distinctive value proposition in the active market and innovation including new franchises, like Bounce Fleece. Today, Old Navy is the number five active apparel brand in the U.S., and the number four brand in the women's active space. As we begin to drive more growth through strategic partnerships that amplify our brand relevance, our latest Disney collaboration kicked off the holiday season with our Jingle Jammies collection, which is exceeding our expectations. Driving excitement across the family and fueling strong performance in the broader sleep category. Another great example is our first designer collaboration with American design legend, Anna Sui. The collection brought high fashion design to a broader audience while staying true to Old Navy's democratic and accessible brand promise. The campaign featured rising Gen Z artist Pink Pantheris and resonated across platforms. In September, we announced plans for a strategic expansion into the beauty category with a phased launch starting with Old Navy. As one of the fastest growing, most resilient retail categories in the U.S., and customer insights that reinforce strong interest in the category, we see a clear and meaningful opportunity to grow in beauty. We recently expanded Old Navy's beauty in 150 stores with select stores offering dedicated shop-in-shops and beauty associates. We intend to use this pilot to inform a thoughtful scaling strategy that will take us from seeding in 2026 to accelerating growth in the years that follow. Old Navy's third-quarter performance reflects the strength of the team's work which is clearly resonating. This brand continues to delight consumers and consistently deliver positive comps while reinforcing Old Navy's position as a brand that defines value, style, and accessibility in American fashion. This gives us confidence as we move into Q4 and beyond. Now let's turn to Gap. Gap delivered another standout quarter, reinforcing the reliability of its execution and the compounded strength of our namesake brand. Comparable sales were up 7% on top of a 3% comp last year, marking the eighth consecutive quarter of positive comps. With growth in average unit retail consideration, organic impressions, and new customers. A clear signal that Gap's momentum is real, repeatable, and resonating. The quarter was fueled by broad-based strength in denim, the centerpiece of our viral campaign Better in Denim, featuring global group Cat's Eye. This campaign demonstrated the power of the playbook in action featuring trend-right products amplified by culturally relevant storytelling. With more than 8 billion impressions, and 500 million views, Better in Denim culminated in a global cultural takeover and has become one of the brand's most successful campaigns to date. Generating significant traffic and double-digit growth in denim. The results speak for themselves. Gap continues to accelerate attracting a younger, highly engaged consumer, particularly Gen Z, who are discovering us while reinforcing loyalty with our core consumer. As Gap brand equity and relevance continues to build, the iconic Gap Arch logo hoodie is a great example of the brand reclaiming its place in the cultural conversation. During the quarter, we marked the thirtieth anniversary of the Gap hoodie with our first-ever Hoodie Day. It was a moment that energized our teams, drove connection with consumers, and contributed to the notable strength in fleece. During the quarter, our recent collaboration with Sandy Liang was another highlight, delivering strong results and continuing to position Gap as a platform for creative partnerships that drive relevance and new customer acquisition. For holiday, the brand is leaning into CashSoft, where you'll see continued innovation with extensions into new silhouettes, on-trend sets, and vibrant colorways. Earlier this month, we launched our highly anticipated Give Your Gift holiday campaign. A continuation of our effort to bridge the gap across generations through music, creativity, and culture, featuring emerging artist Sienna Spyro. Gap's execution of the playbook has been fantastic. And it's been exciting to see the brand build on their success quarter after quarter while continuing to drive distinction and relevance. It's a brand that knows who it is, where it's going, and how to win. And we're looking forward to carrying that momentum into the holiday season. At Banana Republic, we continue to make steady progress. The work to strengthen its positioning, leaning into its heritage, is paying off. Comparable sales were up 4% in the quarter. Reflecting meaningful traction as the brand's reinvigoration takes hold. Growth was driven by continued progress in the harmonization between men's and women's. Men's elevated fashion designs featuring distinctive text and fabrications continue to perform well. And we've seen notable improvement in women's as fit and product refinement are resonating, particularly in dresses and wovens. Building on the success of the brand's prior campaigns, the response to Banana Republic's fall campaign with David Corn Sweat was strong, breaking brand engagement records and fueling growth while expanding cultural reach and resonance. For the holiday season, Banana Republic is leaning into its distinctive position as the modern explorer brand. Our new campaign, shot in the stunning landscape of Ireland, captures this essence well, with our beautiful product featured in our travel-oriented storytelling brought to life through dynamic destination-rich content. This approach is driving stronger brand affinity and proving to be highly impactful with our customers. Overall, Banana Republic's third-quarter results reflect meaningful progress and continued momentum. I'm optimistic the brand is well-positioned as we head into the holiday season. Shifting to Athleta, Maggie Gauger, brand president, has begun to make an impact in her first ninety days. She's taking quick and thoughtful action to begin to reorient the brand. This includes reorganizing the talent structure to align with her vision. The team is doing the right work, acting with speed and urgency to drive progress, but this reset will take time. Our focus is on positioning Athleta for long-term success and returning it to its rightful place as a premium aspirational brand. The brand is at the beginning of its reinvigoration journey. We aren't chasing quick fixes; we are taking a deliberate approach to position the brand for the long term. We're confident that the consistent application of our brand reinvigoration playbook anchored in purpose and heritage will guide Athleta forward. This is about returning to what made the brand great to begin with while reestablishing our clear and distinctive position in the active market. We're encouraged by the steps Maggie and the team have already taken, and we look forward to the continued impact of their leadership as Athleta's reinvigoration takes shape. As we head into the holiday season, our supply chain continues to power strategic advantages. The scale of our global network, across sourcing, logistics, and fulfillment gives us the flexibility and resilience to operate with confidence. Our long-standing vendor partnerships and diversified sourcing footprint are enabling us to move with speed and deliver newness at the pace of demand. We've introduced new automation and AI capabilities across our omni, fulfillment network. From robotic unloaders to advanced storage and retrieval systems, which have increased productivity by nearly 30% compared to just a few years ago. This enables us to meet peak demand with greater speed, agility, and precision. With a fleet of about 2,500 stores globally and the largest specialty apparel e-commerce business in the U.S., we're positioned to serve our customers wherever and however they choose to shop this holiday season. Across The Gap, Inc., our teams are inspired and energized by the work we're doing. And you can feel it. The work we're doing together to drive the business continues to ignite real energy inside the company, creating a culture that's united, motivated, and focused on execution. This is the culture that is carrying us into the holiday season. Where our collective focus is clear: win with the consumer. Deliver with excellence. And keep building on the progress we've made together. In the fourth quarter, we remain focused on executing with excellence. Our Q3 and quarter-to-date performance positions us well for the holiday selling season and gives us the confidence to update our full-year outlook. Increasing net sales growth to the high end of our prior range and raising our operating margin. We look forward to finishing the year strong and creating a clear runway to the next phase of our transformation as we move into 2026 building momentum.
Thank you, Richard, and thanks everyone for joining us this afternoon. We delivered exceptional third-quarter results, surpassing our expectations across multiple key metrics. Our strategy is working, growing brand relevance combined with operational and financial discipline, drove our highest quarterly comparable sales performance in over four years, up 5%. We saw strong performance across the back-to-school and early holiday periods, underscoring the increasing resonance of our brands with consumers. With the Playbook now in its second year, we're beginning to see a flywheel of growth take hold at Old Navy and Gap, with Banana Republic gaining traction. We exceeded our gross margin expectations with strong flow through to our operating margin in the quarter, driven by rigor in the fundamentals. Average unit retail or AUR grew again this quarter, reflecting our compelling product offering and the disciplined execution across our teams. Our brand momentum combined with our strategic supply chain actions enabled a significant portion of the tariff impact on our margins to be mitigated. With the strength of our third-quarter results and our quarter-to-date performance in mind, we are raising our full-year 2025 gross margin and operating margin outlook. With full-year 2025 net sales growth now expected to be at the high end of our prior guidance range. I'll take you through the details of our outlook shortly. We are entering the final stages of fixing the fundamentals. Consistent progress on our strategic priorities has strengthened our position as we move into 2026. Where we will focus on building momentum and creating new growth opportunities. Now turning to third-quarter results. Net sales of $3.9 billion were up 3% year over year, exceeding our expectations. With comparable sales up 5%. By brand, starting with Old Navy, net sales were $2.3 billion, up 5% versus last year with comparable sales up 6%. It's exciting to see the brand winning in strategic categories like denim, active, and kids and baby, supported by strong execution of culturally relevant marketing and partnerships. Turning to Gap brand, net sales of $951 million were up 6% versus last year, and comparable sales were up 7%. Relentless consistent execution of the reinvigoration playbook is fueling sustained momentum for the brand, clearly reflected in the Better in Denim campaign. Banana Republic net sales of $464 million were down 1% year over year with comparable sales up 4%. Our foundational work on the brand from elevated product to culturally relevant storytelling is resonating with consumers and drove the second consecutive quarter of solid performance. Athleta net sales of $257 million decreased 11% versus last year and comparable sales were down 11%. We're focused on applying the playbook with rigor, beginning with the fundamentals as we work to reset the brand for the long term. And while we're eager for results, we are executing a phased plan that will take time. Let's continue to the balance of the P&L. Gross margin of 42.4% declined 30 basis points from last year, but exceeded our expectations. As anticipated, tariffs pressured overall margin levels. However, lower discounting resulted in increased AUR growth driven by the consumer's response to our relevant product and storytelling. Compared to last year, merchandise margins were down 70 basis points due to the estimated 190 basis point impact of tariffs. This implies roughly 120 basis points of underlying margin expansion. We leveraged 40 basis points in the quarter. SG&A increased to $1.3 billion primarily due to the quarterly timing of incentive compensation and continued strategic investments. SG&A as a percentage of net sales was 33.9%, deleveraging 50 basis points versus last year. Third-quarter operating margin of 8.5% was down 80 basis points compared to last year, which includes an estimated 190 basis points of tariff impact. This implies roughly 110 basis points of underlying margin expansion. Earnings per share in the quarter were $0.62, a decrease of 14% versus last year's earnings per share of $0.72, primarily due to the impact of tariffs. Now turning to the balance sheet and cash flow. End of quarter inventory levels were up 5% year over year, primarily attributable to higher costs due to tariffs. Our disciplined inventory management resulted in slightly negative unit inventory, and we believe we ended the quarter with the right inventory composition. We continue to be rigorous in our approach to inventory for the balance of the year. As we shared on our second-quarter call, we've tightened the way we purchase unit inventory to ensure maximum flexibility for various demand scenarios, and to enable us to be more responsive to consumer demand. We expect to operate in line with our inventory principles of unit purchases positioned below sales. The last two years have been about fixing the fundamentals, which includes strengthening the balance sheet. We ended Q3 with cash, cash equivalents, and short-term investments of $2.5 billion, an increase of 13% from last year. Net cash from operating activities was $607 million year to date. And our free cash flow of $280 million year to date demonstrates the rigor we have put into managing the business. Capital expenditures were $327 million year to date. With regard to returning cash to shareholders, in the third quarter we paid $62 million to shareholders in the form of dividends. And the board recently approved a fourth-quarter dividend of 16.5 cents per share. Year to date, we have repurchased 7 million shares for $152 million achieving our goal of offsetting dilution. And while we've achieved our goal, as always, we remain opportunistic. Now turning to our outlook for fiscal 2025. I am pleased with the strength of our Q3 results and solid quarter-to-date performance, which are giving us the confidence to update our fiscal 2025 outlook. We've been operating against a dynamic backdrop for the last few years, and we're expecting the same for the fourth quarter. Our outlook assumes a relatively consistent macro environment, but acknowledges the potential for increasing uncertainties related to consumer behavior, global economic conditions, and geopolitical conditions. As a result, we continue to take a balanced view with our guidance and remain focused on controlling the controllables. Starting with full-year 2025 net sales, we are increasing our outlook to the high end of our prior guidance range and now expect net sales growth of 1.7% to 2% year over year. Our outlook assumes ongoing strength at Old Navy, Gap, and Banana Republic and a longer recovery at Athleta. Moving to gross margin. With our strong Q3 performance, we are raising our full-year gross margin outlook. We now expect the deleverage of about 50 basis points year over year driven by an unchanged estimated annual net tariff impact of approximately 100 to 110 basis points. Excluding the impact of tariffs, this would imply underlying gross margin expansion of approximately 50 to 60 basis points versus last year. Turning to SG&A, we continue to expect SG&A to leverage slightly for the full year. As discussed on last quarter's call, we are driving continuous improvement in the cost structure of the company this year. As we rigorously drive $150 million in cost savings in our core operations through efficiency and effectiveness. We remain committed to reinvesting a portion of the $150 million into future growth projects, including beauty and accessories, as we pursue the long-term success of the company. A portion of these savings will also offset continued inflation. Now we'll turn to fiscal 2025 operating margin. We now expect an operating margin of about 7.2% for the full year, an increase from our prior guidance range of 6.7% to 7%. This continues to include the estimated net tariff impact of approximately 100 to 110 basis points. Excluding the impact of tariffs, this would imply meaningful underlying operating margin expansion of 80 to 90 basis points versus last year. Our income tax rate outlook for the year has increased to approximately 28% and primarily reflects the impact of changes in the amount and mix of our geographic earnings. This increase of one point versus our prior outlook of 27% represents an approximate $0.03 headwind to EPS. Looking to 2026, as we shared on our second-quarter call, we do not expect the annualization of tariffs in 2026 to cause further operating income declines. And we now expect the majority of the mitigation to come from adjustments to our sourcing, manufacturing, and assortments, with the balance driven by targeted pricing. We continue to be mindful of price elasticity and remain focused on maintaining the overall value proposition for our customers. And while pricing is a lever to manage AUR, it's one of many we've been using to manage margin over time. Our third-quarter AUR performance and the momentum of our brands give me confidence that our AUR growth plans are achievable. There will be a timing dynamic to the tariff impact on gross margin in 2026; we estimate a Q1 net tariff impact similar to Q4 followed by meaningful benefits from our mitigation efforts in Q2. The back half of 2026 should turn to a tailwind as our actions build and we lap most of this year's tariff impact. In closing, our Q3 results reflect strong execution of our reinvigoration playbook driving consistency and growth across our largest brands. Continued cost discipline is enabling reinvestment in strategic growth opportunities, while our scale and supply chain strength support ongoing tariff mitigation. When we perform with excellence, it builds confidence. Confidence fuels execution. Execution drives growth. This flywheel is the engine of our momentum. As we look to deliver this holiday season, we remain focused on operational excellence and advancing our ambition to become a high-performing company that delivers sustainable, profitable growth and long-term value for our shareholders. I'd like to thank the team for their commitment to excellence and delivering results in support of our transformation journey. With that, we'll open up the line for questions.
Thank you. Alex, thank you. First off, I think it's clear our strategy is working and it is showing up in the momentum that we're seeing in our results. All three of our largest brands exceeding expectations. You know, they'd be up 6%, the Banana Republic up 4%, and Gap delivered another standout quarter with a strong comp of 7% and that's on top of 3% last year, and it represents the eighth consecutive quarter of positive comps for us. You know, this consistency is setting new records for the brand, and it's reinforcing our confidence in its long-term growth trajectory. Driven by compelling product assortments, partnerships, and marketing have really resulted in growth across all income cohorts. We have seen more high-income consumers choosing Gap, and we really do believe that with the strong competitive position that we've taken premium and value, and the fact that we're bridging the generation gap, it's a really exciting time to see Gap continuing to accelerate. We have been attracting a younger highly engaged consumer, particularly with Gen Z as they discover the brand. And it's reinforcing loyalty with our core consumer. So the performance in the quarter, which, as you know, was fueled by our broad-based strength in denim, the centerpiece of our viral campaign, Better in Denim, featuring the global group, Cat's Eye, did incredibly well. I mean, we generated more than 8 billion impressions, I think we had over 500 million views. It was the denim story everybody wanted to be part of. We increased our ranking in the denim category. Gap is now the number six adult denim brand in the U.S., up from eight last year. Collaborations are continuing to drive relevance and revenue with our latest collaboration this quarter with Sandy Liang, which was incredibly successful again attracting new younger customers to the brand. And it's exciting to see the brand just continuing to build on their success quarter after quarter. And we're looking forward to carrying that momentum into the holiday season and beyond.
As it relates to growth more oh, sorry. I'm going to finish up, Alex, for you on gross margin. So for gross margin in the quarter, we did exceed our expectations in gross margin. By over 100 basis points, and that was actually driven by an in-line expectation as it relates to tariffs. So tariffs of 190 basis points were as expected. But the outperformance in the quarter really came from standout performance, particularly at Old Navy and Gap, and better than expected AURs as consumers really responded to our product and storytelling, which enabled us to have lower discounting in the quarter.
Thanks, Bob. We approach pricing as we always have. I mean, we consider all the various inputs while maintaining our overall value proposition for consumers. And in Q3, as our brands continue to gain more relevance and the rigor that we put around inventory management becomes more foundational, we are increasing our price elasticity, and we've been driving higher sell-through at full price. We did take select pricing in three select categories denim, which saw double-digit growth, and the strength of our execution is really resonating with customers, and we saw growth, as I mentioned, across all income cohorts. The sales were driven by both units and AUR. We had overall AUR improving versus last year. We saw particularly strength in Old Navy and Gap with customers that were really responding well to our style, the quality, and the value which we continue to advance. Banana Republic AURs also were strong. This is resulting in less discounting better regular price sell-through, and giving us confidence that we can continue to drive AUR growth as we enter the fourth quarter.
分析師問答
Thanks and congrats on a really nice quarter. So Richard, could you speak to drivers of the top line inflection that you saw at Old Navy this quarter? Any change in momentum, early holiday? And relative to the consistency that you've now clearly shown at the Gap concept, I guess, how do you see Old Navy differentiated as it relates to the market share opportunity for that brand? And then Katrina, just given actions that you've taken to the cost structure, how best to think about annual operating income dollar growth if low single-digit top line was the baseline multiyear moving forward?
Matthew, thank you for the question. And thrilled to talk about Old Navy. We had an incredibly strong quarter. Comps up were 6%, with the brand consistently gaining market share over the last two years. It is the number one specialty apparel brand in the U.S., and the performance this quarter really speaks to the brand's strength, consistency, and continued momentum. Customers are responding to what Old Navy does best. We give great style at great value. We saw healthy growth across all income cohorts. In AUR, it was driven by trend-right product, which, again, was amplified by compelling creative and better storytelling for our brands. We've been winning in the categories that we've been pursuing with intent. And we've shared those along the way, kids and baby, denim, and active have all been driving the momentum. Active in particular was a standout in the quarter. We delivered double-digit growth and I believe it's underscoring the power of our value proposition and innovation. Differentiation, as it relates to the market share opportunities that we see, we look at partnerships. Disney's partnership with us. We just presented Jingle Jammies, which was an incredible presentation across the family. It exceeded expectations. We also introduced Anna Sui's collaboration with us, which was particularly meaningful as the first designer collaboration where we're bringing high fashion to a broader audience. All of this while we're just beginning to expand the brand into beauty, which of course is early days, but we see incredibly high potential opportunity for Old Navy. For that category and the broader portfolio over time. So look, I'm thrilled with Old Navy's consistency in the quarter performance. And I actually am particularly excited about our holiday offering. At giftable price points, and we are ready to execute with excellence.
And then, Matt, as it relates to your other question, I would say as you called out, you know, we've done a lot of restructuring over the last few years. And then this year, we previewed that we're saving about $150 million in our cost structure. We are reinvesting a portion of that into future growth opportunities because we want to be able to seed this next phase, which we're saying is building momentum that we hope over time leads to accelerated growth. So balancing the savings with what we think are important investments for the long term, What I would say is this year, the operating margin that we've guided to of about 7.2% is really only modest deleverage compared to last year, and that's while absorbing 100 to 110 basis points of operating excuse me, of tariff impact which does show the way we are managing the business with rigor both through cost and margin improvements. As we look forward, we've also said that in 2026, we don't expect the annualization of tariffs to cause further operating income declines as we work hard to mitigate those costs. Once tariffs are fully reflected in the base, we do believe the consistency in our core combined with top-line benefit related to the high potential growth opportunities that we're seeding in '26 should provide sales growth that benefits operating income over time. So more to come on what that algorithm turns out to be, but we feel good about the work we've been doing, and we're certainly pleased with our results.
Brooke, thanks for that question. Stores are a really important way for customers to experience our brand. I mean, they bring our product storytelling and service to life in a way that digital just can't. With a company operating a fleet of about 2,500 stores, we are always optimizing our retail footprint. We're closing underperforming stores, repositioning some locations that are more relevant to our customers. And we evaluate new store openings. As you know, over the last several years, we've closed about 350 stores that were unprofitable. Last year, we closed about 56 stores across our portfolio. We expect to close approximately another 35 in fiscal 2025, with the majority of those closures being specific to Banana Republic. I believe we're at a pivotal point right now where the fleet is really well positioned and we've been testing new formats and experiences. Gap Flatiron in New York has been functioning for about a year with great learnings that we've started to expand across our Gap fleet with denim shops, new refresh shops here in San Francisco, and a variety of others that are on plan. Banana Republic specifically in SoHo and other locations that we've been refreshing with some great results and, of course, Old Navy and Athleta up at bat. We continue to evaluate these tests and their performance, and are getting more and more confidence in the revenue and relevance and the strong returns that they've been driving. We've begun to invest rationally and selectively in the areas that we think will drive the that we're looking for. And we will continue to keep everybody posted as we look to the combination of repositioning our stores, refreshing must-win stores, and again, looking to start to open up new stores where it makes sense strategically. Thank you, operator. This was an exceptional quarter, and I'm really proud of this talented team that continues to deliver quarter after quarter. As we look to finish the year strong, our team is fired up and our focus is clear. Continue to execute with excellence and win with the customer this holiday. Thank you for joining us today. For those of you who celebrate, wishing you a happy Thanksgiving, and we look forward to seeing you in our stores this holiday season. Thanks all.
And ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.