Gap Inc GPS
Q3 2012 Earnings Call Transcript

Transcript Call Date 11/15/2012

Operator: Good afternoon, ladies and gentlemen. My name is Jumaria, and I will be your conference operator today. At this time, I would like to welcome everyone to the Gap Inc. Third Quarter 2012 Conference Call. At this time, all participants are in a listen-only mode. As a reminder, please limit your questions to one per participant.

I would now like to introduce your host, Katrina O'Connell, Vice President of Investor Relations.

Katrina O'Connell - VP of Corporate Finance and IR: Good afternoon, everyone. Welcome to Gap Inc.'s third quarter 2012 earnings conference call. For those of you participating in the webcast, please turn to Slides 2 and 3.

I'd like to remind you that the information made available on this webcast and conference call contains forward-looking statements. For information on factors that could cause our actual results to differ materially from the forward-looking statements as well as reconciliations of measures we're required to reconcile to GAAP financial measures, please refer to today's press release as well as our most recent Annual Report on Form 10-K and our most recent quarterly report on Form 10-Q, all of which are available on These forward-looking statements are based on information as of November 15, 2012, and we assume no obligation to publicly update or revise our forward-looking statements.

Joining us on the call today are Chairman and CEO, Glenn Murphy and Executive Vice President and CFO, Sabrina Simmons.

Now, I'd like to turn the call over to Glenn.

Glenn K. Murphy - Chairman and CEO: Thank you, Katrina and good afternoon, everybody. Before I hand the call over to Sabrina I do want to talk about the quarter and the performance of Gap Inc. in Q3; I want to talk about the announcement for month ago the move of Gap Inc. to global brands. So, let me start with that.

Month ago we announced that our business made a structural change and will be effective in February 2013. In 2008, Gap Inc. was an American-centric channel-led business. That was completely the appropriate structure for that time. But we have been on a journey, we have been moving the Company at a pace that we are comfortable with you could never go for an American-centric organization to global brands without having stores in China, without having online that was launched globally, without having outlet stores internationally. As those proof points came together, it made sense this was the right time to move to a global brand structure.

This was driven by the customer. Customers clearly are becoming more and more global. As we go around the world and all of us travel there is more in common than I've ever seen between a customer in New York and London and Tokyo and Toronto and Istanbul. So, from our perspective looking at our business globally it's very important to have one lens, one management team looking at the brand across all different channels in all different international countries. We're expecting to get out of this change is speed, for sure, with one team deciding across every touch point we have to the customer. We are going to get more efficiency which is critical. This change definitely puts the brand ahead of channels. Channels are important, but corporate strategy has been clearly identified as multiple channels, but this is putting the brand first, and secondarily it is about global over local. Local is important. We need to understand the local needs of our customers in Gap brand, in particular, that operates in over 40 countries, but this is a global approach to the business first. This structure from my perspective has definitely been put in place to fuel long-term growth. We've had a good year so far on growth. We want have strong growth every single year looking forward and this structure is going to be an enabler to that kind of performance.

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