Gap Shares Soar After Company Unveils Three-year Growth Strategy

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Gap Inc. executives put an optimistic spin on the business as they spoke with investors during the company’s 2020 Investor Meeting.

Gap Inc. executives put an optimistic spin on the business Thursday as they spoke with investors during the company’s 2020 Investor Meeting.

“Our North Star is that we grow purpose-led billion-dollar brands that shape people’s way of life,” Syngal said. “We’re closely watching the economy, the retail landscape and the competitive environment to evaluate how we can strategically play to win; how we can do things that only we have the authority to do.

The end goal is to “drive low-to mid-to-single-digit sales growth annually, deliver [earnings before interest and taxes] margin expansion to achieve a 10 percent and beyond [earnings before interest and taxes] margin in 2023, generate operating cash flow of about 10 percent of sales and efficiently deploy cash through capital expenditures and return of capital to shareholders,” Katrina O’Connell, chief financial officer, said during the presentation.

“They remain a very important underpinning of our strategy. You can’t create omni customers without stores,” added Green, who pointed out that omnichannel guests on average spend about three-and-a-half times more than single-channel shoppers. “One of the options being explored in our strategic review of Europe is the possible shift of our company-operated Gap e-commerce [business] and about 120 Gap stores in the U.K., France, Ireland and Italy, to a partner model by the end of the second quarter in 2021,” O’Connell said.

 

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