UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~November~~May 23, ~~2024~~2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 1-7562

THE GAP, INC.

(Exact name of registrant as specified in its charter)


Delaware						94-1697231
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

Two Folsom Street

San Francisco, California 94105

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (415) 427-0100

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, $0.05 par value

GAP

The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

The number of shares of the registrant’s common stock outstanding as of ~~November~~May 1923, ~~2024~~2025 was ~~377~~373,~~121~~066,~~870~~495.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. All statements other than those that are purely historical are forward-looking statements. Words such as “expect,” “anticipate,” “believe,” “estimate,” “intend,” “plan,” “project,” and similar expressions also identify forward-looking statements. Forward-looking statements include, but are not limited to, statements regarding the following:

•monitoring the ~~potential~~ impact of ~~global~~changes ~~economic~~in ~~conditions~~U.S. trade policy and tariffs on the assumptions and estimates used when preparing ~~the~~our ~~Condensed~~financial ~~Consolidated Financial Statements~~information;

•the impact of recent accounting pronouncements;

•the timing of revenue recognition of upfront payments related to our credit card program agreement;

•the timing of recognition in income of unrealized gains and losses from designated cash flow hedges;

•the impact of losses due to indemnification obligations on the Condensed Consolidated Financial Statements;

•the outcome of proceedings, lawsuits, disputes, and claims, including the impact of such actions on the Condensed Consolidated Financial Statements and our financial results;

•meeting the closing conditions to transfer the Gap Taiwan operations;

•our arrangements with third parties to operate stores and websites selling apparel and related products under our brand names;

•maintaining and building upon financial and operational rigor, through an optimized cost structure and disciplined inventory management;

•reinvigorating our brands to drive relevance and an engaging omni-channel experience;

•strengthening and evolving our operating platform with a digital-first mindset to drive scale and efficiency;

•energizing our culture by attracting and retaining strong talent;

•continuing to integrate ~~social and environmental~~ sustainability into business practices to support long-term growth;

•the ~~expected~~ impact of ~~the~~changes ~~Pillar~~to ~~Two~~U.S. ~~rules~~trade onpolicy ~~our~~and ~~fiscal~~tariffs ~~2024~~on ~~effective~~the ~~tax~~cost ~~rate~~of ~~and~~our ~~ongoing~~merchandise ~~monitoring~~and ofgross ~~related legislative action~~margins;

•the potential impact of macroeconomic factors on our ~~ability~~business toand ~~supplement~~the ~~near-term~~retail ~~liquidity~~environment, ifcontinued ~~necessary,~~uncertainty ~~with~~related ~~our~~to ~~ABL~~the ~~Facility~~macroeconomic orenvironment, ~~other~~monitoring ~~available~~macroeconomic ~~market~~conditions, ~~instruments;~~and evaluating potential mitigating actions;

•~~the~~our ~~impact~~ability ofto ~~the~~supplement ~~seasonality~~near-term ofliquidity, ~~our~~if ~~operations~~necessary, inwith ~~addition~~our toABL ~~the~~Facility ~~impact~~(as ofdefined ~~global~~below) ~~economic~~or ~~conditions,~~other onavailable ~~certain~~market ~~cash inflows and outflows~~instruments;

•the ~~ability~~impact of ~~our~~the ~~cash~~seasonality ~~flows~~of ~~from~~ our operations, ~~current~~in ~~balances~~addition ofto ~~cash, cash equivalents, and short-term investments,~~ the ~~Senior~~impact ~~Notes~~of ~~and~~macroeconomic ~~the ABL Facility~~factors, ~~and~~on ~~other~~certain ~~available~~cash ~~market~~inflows ~~instruments to support our business operations~~ and ~~liquidity requirements~~outflows;

•the ability of our current balances of cash, cash equivalents, and short-term investments, along with our cash flows from operations, our ABL Facility, and other available market instruments to support our business operations and liquidity requirements;

•the importance of our sustained ability to generate free cash flow, which is a non-GAAP financial measure and is defined and discussed in more detail in Part 1, Item 2 of this Form 10-Q below;

•our dividend policy, including the potential timing and amounts of future dividends; and

•the impact of changes in internal control over financial reporting.

Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, without limitation, the following risks, any of which could have an adverse effect on our business, financial condition, results of operations, or reputation:

•the overall global economic and geopolitical environment, ~~including~~uncertainties ~~the~~related ~~ongoing~~to ~~Russia-Ukraine~~government ~~and~~fiscal, ~~Israel-Hamas~~monetary, ~~conflicts~~trade, and ~~recent~~tax ~~elections in the United States~~policies, and ~~impacts on~~ consumer spending patterns;

•~~social~~recent ~~and~~changes ~~political unrest~~ in ~~our~~U.S. ~~sourcing~~trade ~~countries,~~policy ~~including~~and ~~Bangladesh~~tariffs, and ~~disruptions~~the torisk ~~global~~of ~~trade~~potential ~~and~~future ~~shipping~~changes ~~capacity,~~or ~~including~~worsening intrade tensions between the ~~Red~~United ~~Sea~~States and other countries;

•the risk that wetrade ormatters, ~~our~~including ~~franchisees~~tariffs ~~may~~on begoods ~~unsuccessful~~imported infrom ~~gauging~~our ~~apparel~~sourcing ~~trends~~countries, ~~and~~could ~~changing~~increase ~~consumer~~the ~~preferences~~cost or ~~responding~~reduce ~~with~~the ~~sufficient~~supply ~~lead~~of ~~time~~apparel available to us;

•the risk that our enterprise risk management efforts will not be successful in mitigating the negative impact of tariffs;

•the highly competitive nature of our business in the United States and internationally;

•the risk that we or our franchisees may be ~~unable~~unsuccessful toin ~~manage~~gauging ~~our~~apparel ~~inventory~~trends ~~effectively~~ and ~~the~~changing ~~resulting~~consumer ~~impact~~preferences onor ~~our~~responding ~~gross~~with ~~margins~~sufficient ~~and~~lead ~~sales~~time;

•the risk that ~~our~~we ~~investments~~fail into ~~customer~~maintain, ~~digital,~~enhance and ~~omni-channel~~protect ~~shopping~~our ~~initiatives~~brand ~~may~~image ~~not~~and ~~deliver the results we anticipate~~reputation;

•the risk that we ~~fail~~do tonot ~~maintain,~~successfully ~~enhance~~implement our marketing efforts, ~~and~~or ~~protect~~that our ~~brand~~talent ~~image~~partnerships ~~and~~expose ~~reputation~~us to reputational or other risks;

•the risk that we may be unable to manage our inventory and fulfillment operations effectively and the resulting impact on our sales and results of operations;

•the risk of loss or theft of assets, including inventory shortage;

•the risk that we fail to manage key executive succession and retention or continue to attract qualified personnel;

•reductions in income and cash flow from our credit card arrangement related to our private label and co-branded credit cards;

•the risk that changes in our business strategy or restructuring our operations may not generate the intended benefits or projected cost savings;

•the risk that trade matters could increase the cost or reduce the supply of apparel available to us;

•the risks to our business, including our costs and global supply chain, associated with global sourcing and manufacturing;

•the risks of U.S. or foreign labor strikes, work stoppages, boycotts, port congestion, and other disruptions to our sourcing operations;

•the risks to our reputation or operations associated with importing merchandise from foreign countries, including failure of our vendors to adhere to our Code of Vendor Conduct;

•the risk that we fail to manage key executive succession and retention and to continue to attract qualified personnel;

•the risk that we or our franchisees may be unsuccessful in identifying, negotiating, and securing new store locations and renewing, modifying, or terminating leases for existing store locations effectively;

•engaging in or seeking to engage in strategic transactions that are subject to various risks and uncertainties;

•the risk that our efforts to expand internationally may not be successful;

•the risk that our franchisees and licensees could impair the value of our brands;

•the risk ofthat ~~data~~our orefforts ~~other~~to ~~security~~expand ~~breaches~~internationally ~~or vulnerabilities that~~ may ~~result~~not inbe ~~increased costs, violations of law, significant legal and financial exposure, and a loss of confidence in our security measures~~successful;

•the risk that ~~failures~~our ~~of,~~investments orin ~~updates~~customer, ordigital, ~~changes to~~omni-channel, ~~our~~and ITother ~~systems~~strategic initiatives may ~~disrupt~~not ~~our~~deliver ~~operations~~the results we anticipate;

•~~the~~engaging ~~risk~~in ~~that~~or ~~our~~seeking ~~comparable~~to ~~sales~~engage ~~and~~in ~~margins~~strategic ~~may~~transactions ~~experience fluctuations,~~ that weare ~~may~~subject ~~fail~~ to ~~meet~~various ~~financial~~risks ~~market~~and ~~expectations, or that the seasonality of our business may experience fluctuations~~uncertainties;

•the risk of information security breaches or vulnerabilities that may result in increased costs, violations of law, significant legal and financial exposure, and a loss of confidence in our security measures;

•the risk that failures of, or updates or changes to, our digital and information technology systems, including our continued integration of data science and artificial intelligence, may disrupt our operations;

•the risk that our technology systems that support our e-commerce platform may not be effective or function properly;

•reductions in income and cash flow from our credit card programs;

•the risk of foreign currency exchange rate fluctuations;

•the risk that our comparable sales and margins may experience fluctuations or that we may fail to meet financial market expectations;

•the risk that our level of indebtedness may impact our ability to operate and expand our business;

•the risk that we and our subsidiaries may be unable to meet our obligations under our indebtedness agreements;

•the risk that covenants in our indebtedness agreements may restrict or limit our business;

•the risk that changes in our credit profile or deterioration in market conditions may limit our access to the capital markets;

•~~natural~~evolving ~~disasters,~~regulations ~~public~~and ~~health~~expectations ~~crises~~with ~~(such~~respect asto ~~pandemics~~environmental, ~~and epidemics)~~social, ~~political~~and ~~crises~~governance ~~(such~~matters, asand ~~the~~increased ~~ongoing~~scrutiny ~~Russia-Ukraine~~of ~~and Israel-Hamas conflicts)~~diversity, ~~negative global climate patterns~~equity, orand ~~other~~inclusion ~~catastrophic events~~initiatives;

•~~evolving~~the ~~regulations~~adverse ~~and~~impacts ~~expectations~~of ~~with~~climate ~~respect~~change toon ~~ESG~~our ~~matters, including climate reporting~~business;

•~~the~~natural ~~adverse~~disasters, ~~effects~~public ofhealth ~~climate~~crises, ~~change~~political oncrises, ~~our~~negative ~~operations~~global ~~and~~climate ~~those of our franchisees~~patterns, ~~vendors,~~or ~~and~~ other ~~business~~catastrophic ~~partners~~events;

•our failure to comply with applicable laws and regulations and changes in the regulatory or administrative landscape;

•the risk that we will not be successful in defending various proceedings, lawsuits, disputes, and claims;

•the risk that ~~our~~the ~~estimates~~assumptions and ~~assumptions~~estimates used when preparing the Condensed Consolidated Financial Statements, including estimates and assumptions regarding inventory valuation, income taxes and valuation allowances, sales return and bad debt allowances, deferred revenue, and the impairment of long-lived assets, are inaccurate or may change, and the resulting impact on our results of operations;

•the risk that changes in the geographic mix and level of income or losses, the expected or actual outcome of audits, changes in deferred tax valuation allowances, and new legislation could impact our effective tax rate, or that we may be required to pay amounts in excess of established tax liabilities; and

•the risk that changes in our business structure, our performance, or our industry could result in reductions in our pre-tax income or utilization of existing tax carryforwards in future periods, and require additional deferred tax valuation allowances; and

•the risk that the adoption of new accounting pronouncements will impact future results.

Additional information regarding factors that could cause results to differ can be found in our Annual Report on Form 10-K for the fiscal year ended February 31, ~~2024~~2025 and our other filings with the U.S. Securities and Exchange Commission.

Future economic and industry trends that could potentially impact net sales and profitability are difficult to predict. These forward-looking statements are based on information as of ~~November~~May 2630, ~~2024~~2025. We assume no obligation to publicly update or revise our forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.

We suggest that this document be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended February 31, ~~2024~~2025.

WHERE YOU CAN FIND MORE INFORMATION

Investors and others should note that Gap Inc. announces material financial and operational information to its investors using its Investor Relations website, press releases, SEC filings, and public conference calls and webcasts. Gap Inc. and each of its brands also use LinkedIn and Instagram as a means of disclosing information about Gap Inc. and for complying with disclosure obligations under Regulation FD. The social media channels that Gap Inc. and its brands intend to use as a means of disclosing information described above may be updated from time to time as listed on Gap Inc.’s Investor Relations website. The information we post through these channels is not part of this Quarterly Report.

THE GAP, INC.

TABLE OF CONTENTS

		Page
	PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets as of November 2, 2024, February 3, 2024, and October 28, 2023	1
	Condensed Consolidated Balance Sheets as of May 3, 2025, February 1, 2025, and May 4, 2024	1
	Condensed Consolidated Statements of Operations for the 13 Weeks and 39 Weeks Ended November 2, 2024 and October 28, 2023	2
	Condensed Consolidated Statements of Operations for the 13 Weeks Ended May 3, 2025 and May 4, 2024	2
	Condensed Consolidated Statements of Comprehensive Income for the 13 Weeks and 39 Weeks Ended November 2, 2024 and October 28, 2023	3
	Condensed Consolidated Statements of Comprehensive Income for the 13 Weeks Ended May 3, 2025 and May 4, 2024	3
	Condensed Consolidated Statements of Stockholders' Equity for the 13 Weeks and 39 Weeks Ended November 2, 2024 and October 28, 2023	4
	Condensed Consolidated Statements of Stockholders' Equity for the 13 Weeks Ended May 3, 2025 and May 4, 2024	4
	Condensed Consolidated Statements of Cash Flows for the 39 Weeks Ended November 2, 2024 and October 28, 2023	6
	Condensed Consolidated Statements of Cash Flows for the 13 Weeks Ended May 3, 2025 and May 4, 2024	5
	Notes to Condensed Consolidated Financial Statements	76
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1514
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2119
Item 4.	Controls and Procedures	2219
	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	2320
Item 1A.	Risk Factors	2320
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2321
Item 5.	Other Information	2321
Item 6.	Exhibits	2422

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

THE GAP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

($ and shares in millions except par value)

~~November~~May 23,~~2024~~2025

February 31,~~2024~~2025

~~October~~May 284,~~2023~~2024

ASSETS

Current assets:

Cash and cash equivalents

1,~~969~~976

12,~~873~~335

1,~~351~~532

Short-term investments

~~250~~244

—253

—199

Merchandise inventory

2,~~331~~097

12,~~995~~067

21,~~377~~952

Other current assets

~~580~~567

~~527~~548

~~646~~514

Total current assets

54,~~130~~884

45,~~395~~203

4,~~374~~197

Property and equipment, net of accumulated depreciation of $4,985, $4,874, and $4,890

2,546

2,566

2,552

Property and equipment, net of accumulated depreciation of $5,035, $4,930, and $4,952

2,470

2,496

2,528

Operating lease assets

3,~~217~~267

3,~~115~~240

3,~~200~~207

Other long-term assets

~~960~~944

~~968~~946

~~926~~976

Total assets

11,~~853~~565

11,~~044~~885

1110,~~052~~908

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

1,~~523~~292

1,~~349~~488

1,~~433~~196

Accrued expenses and other current liabilities

~~1,135~~841

1,~~108~~083

~~1,078~~942

Current portion of operating lease liabilities

~~617~~633

~~600~~632

~~604~~624

Income taxes payable

5088

3953

2444

Total current liabilities

32,~~325~~854

3,~~096~~256

32,~~139~~806

Long-term liabilities:

Long-term debt

1,~~489~~490

1,~~488~~490

1,~~488~~489

Long-term operating lease liabilities

3,~~360~~363

3,353

3,~~456~~387

Other long-term liabilities

~~544~~537

~~512~~522

~~509~~519

Total long-term liabilities

5,~~393~~390

5,~~353~~365

5,~~453~~395

Commitments and contingencies (see Note 9)

Stockholders’ equity:

Common stock $0.05 par value

Authorized 2,300 shares for all periods presented; Issued and Outstanding 377, 372, and 371 shares

Authorized 2,300 shares for all periods presented; Issued and Outstanding 374, 374, and 375 shares

Additional paid-in capital

~~177~~91

~~113~~146

93119

Retained earnings

23,~~889~~171

23,~~420~~039

2,~~291~~522

Accumulated other comprehensive income

5040

4360

5847

Total stockholders’ equity

3,~~135~~321

23,~~595~~264

2,~~460~~707

Total liabilities and stockholders’ equity

11,~~853~~565

11,~~044~~885

1110,~~052~~908

See Accompanying Notes to Condensed Consolidated Financial Statements

THE GAP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

13 Weeks Ended

~~39 Weeks Ended~~

($ and shares in millions except per share amounts)

~~November~~May 23,~~2024~~2025

~~October~~May 284,~~2023~~2024

~~November 2,2024~~

~~October 28,2023~~

Net sales

3,~~829~~463

3,~~767~~388

~~10,937~~

~~10,591~~

Cost of goods sold and occupancy expenses

2,~~194~~015

21,~~211~~991

~~6,322~~

~~6,488~~

Gross profit

1,~~635~~448

1,~~556~~397

~~4,615~~

~~4,103~~

Operating expenses

1,~~280~~188

1,~~306~~192

~~3,762~~

~~3,757~~

Operating income

~~355~~260

~~250~~205

~~853~~

~~346~~

Interest expense

2821

Interest income

(2926)

(2824)

~~(80)~~

~~(58)~~

Income before income taxes

~~361~~263

~~250~~208

~~865~~

~~338~~

Income tax expense

8770

3250

~~227~~

Net income

~~274~~193

~~218~~158

~~638~~

~~317~~

Weighted-average number of shares - basic

~~377~~375

~~371~~374

~~376~~

~~369~~

Weighted-average number of shares - diluted

~~383~~382

~~375~~383

~~383~~

~~373~~

Earnings per share - basic

0.7351

0.5942

~~1.70~~

~~0.86~~

Earnings per share - diluted

0.7251

0.5841

~~1.67~~

~~0.85~~

See Accompanying Notes to Condensed Consolidated Financial Statements

THE GAP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	13 Weeks Ended				~~39 Weeks Ended~~
($ in millions)	~~November~~May 23,~~2024~~2025		~~October~~May 284,~~2023~~2024		~~November 2,2024~~		~~October 28,2023~~
Net income	$	~~274~~193	$	~~218~~158	$	~~638~~	$	~~317~~
Other comprehensive income (loss), net of tax
Foreign currency translation and other	(3)		5		—		1
Foreign currency translation and other, net of tax expense of $1 and $—	(2)		(1)
Change in fair value of derivative financial instruments, net of tax expense of $1, $1, $6, $3	5		16		11		22
Change in fair value of derivative financial instruments, net of tax expense (tax benefit) of $(2) and $1	(14)		7
Reclassification adjustment for gains on derivative financial instruments, net of (tax expense) tax benefit of $(1), $1, $(6), $—	(3)		(7)		(4)		(13)
Reclassification adjustment for gains on derivative financial instruments, net of tax expense of $(1) and $—	(4)		(2)
Other comprehensive income (loss), net of tax	(120)		144		7		10
Comprehensive income	$	~~273~~173	$	~~232~~162	$	~~645~~	$	~~327~~

See Accompanying Notes to Condensed Consolidated Financial Statements

THE GAP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

	Common Stock			AdditionalPaid-inCapital		RetainedEarnings		AccumulatedOtherComprehensiveIncome
($ and shares in millions except per share amounts)	Shares	Amount								Total
Balance as of August 3, 2024	376	$	19	$	159	$	2,672	$	51	$	2,901
Balance as of February 1, 2025	374	$	19	$	146	$	3,039	$	60	$	3,264
Net income for the 13 weeks ended November 2, 2024						274				274
Net income for the 13 weeks ended May 3, 2025						193				193
Other comprehensive loss, net of tax								(120)		(120)
Repurchases and retirement of common stock	(4)	—		(70)		—				(70)
Issuance of common stock related to stock options and employee stock purchase plans	1	—		6						6
Issuance of common stock and withholding tax payments related to vesting of stock units	—3	—		(1528)						(1528)
Share-based compensation, net of forfeitures				37						37
Common stock dividends declared and paid ($0.165 per share)						(61)				(61)
Balance as of May 3, 2025	374	$	19	$	91	$	3,171	$	40	$	3,321
Balance as of February 3, 2024	372	$	19	$	113	$	2,420	$	43	$	2,595
Net income for the 13 weeks ended May 4, 2024						158				158
Other comprehensive income, net of tax								4		4
Issuance of common stock related to stock options and employee stock purchase plans	1	—		10						10
Issuance of common stock and withholding tax payments related to vesting of stock units	2	—		(31)						(31)
Share-based compensation, net of forfeitures				27						27
Common stock dividends declared and paid ($0.15 per share)						(5756)				(5756)
Balance as of November 2, 2024	377	$	19	$	177	$	2,889	$	50	$	3,135
Balance as of May 4, 2024	375	$	19	$	119	$	2,522	$	47	$	2,707
Balance as of July 29, 2023	369	$	18	$	73	$	2,128	$	44	$	2,263
Net income for the 13 weeks ended October 28, 2023						218				218
Other comprehensive income, net of tax								14		14
Issuance of common stock related to stock options and employee stock purchase plans	1	—		5						5
Issuance of common stock and withholding tax payments related to vesting of stock units	1	—		(5)						(5)
Share-based compensation, net of forfeitures				20						20
Common stock dividends declared and paid ($0.15 per share)						(55)				(55)
Balance as of October 28, 2023	371	$	18	$	93	$	2,291	$	58	$	2,460

See Accompanying Notes to Condensed Consolidated Financial Statements

THE GAP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF ~~STOCKHOLDERS’~~CASH ~~EQUITY~~FLOWS (Unaudited)

(Unaudited)


	13 Weeks Ended
($ in millions)	May 3, 2025		May 4, 2024
Cash flows from operating activities:
Net income	$	193	$	158
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Depreciation and amortization	121		124

Share-based compensation	37		27





Non-cash and other items	(1)		(2)



Deferred income taxes	8		1
Changes in operating assets and liabilities:
Merchandise inventory	(18)		38
Other current assets and other long-term assets	(45)		15

Accounts payable	(203)		(152)
Accrued expenses and other current liabilities	(271)		(158)
Income taxes payable, net of receivables and other tax-related items	55		13
Other long-term liabilities	3		(2)
Operating lease assets and liabilities, net	(19)		(32)
Net cash provided by (used for) operating activities	(140)		30
Cash flows from investing activities:
Purchases of property and equipment	(83)		(93)




Purchases of short-term investments	(78)		(201)
Proceeds from sales and maturities of short-term investments	88		3




Net cash used for investing activities	(73)		(291)
Cash flows from financing activities:







Proceeds from issuances under share-based compensation plans	6		10
Withholding tax payments related to vesting of stock units	(28)		(31)
Repurchases of common stock	(70)		—

Cash dividends paid	(61)		(56)

Net cash used for financing activities	(153)		(77)
Effect of foreign exchange rate fluctuations on cash, cash equivalents, and restricted cash	5		(2)
Net decrease in cash, cash equivalents, and restricted cash	(361)		(340)
Cash, cash equivalents, and restricted cash at beginning of period	2,365		1,901
Cash, cash equivalents, and restricted cash at end of period	$	2,004	$	1,561



Supplemental disclosure of cash flow information:
Cash paid for interest during the period	$	31	$	31
Cash paid for income taxes during the period, net of refunds	$	11	$	39

	Common Stock			AdditionalPaid-inCapital		RetainedEarnings		AccumulatedOtherComprehensiveIncome
($ and shares in millions except per share amounts)	Shares	Amount								Total
Balance as of February 3, 2024	372	$	19	$	113	$	2,420	$	43	$	2,595
Net income for the 39 weeks ended November 2, 2024						638				638
Other comprehensive income, net of tax								7		7
Issuance of common stock related to stock options and employee stock purchase plans	2	—		27						27
Issuance of common stock and withholding tax payments related to vesting of stock units	3	—		(48)						(48)
Share-based compensation, net of forfeitures				85						85
Common stock dividends declared and paid ($0.45 per share)						(169)				(169)
Balance as of November 2, 2024	377	$	19	$	177	$	2,889	$	50	$	3,135
Balance as of January 28, 2023	366	$	18	$	27	$	2,140	$	48	$	2,233
Net income for the 39 weeks ended October 28, 2023						317				317
Other comprehensive income, net of tax								10		10
Issuance of common stock related to stock options and employee stock purchase plans	2	—		18						18
Issuance of common stock and withholding tax payments related to vesting of stock units	3	—		(16)						(16)
Share-based compensation, net of forfeitures				64						64
Common stock dividends declared and paid ($0.45 per share)						(166)				(166)
Balance as of October 28, 2023	371	$	18	$	93	$	2,291	$	58	$	2,460

See Accompanying Notes to Condensed Consolidated Financial Statements

THE GAP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

	39 Weeks Ended
($ in millions)	November 2,2024		October 28,2023
Cash flows from operating activities:
Net income	$	638	$	317
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	371		394
Share-based compensation	85		64
Non-cash and other items	(4)		41
Gain on sale of building	—		(47)
Deferred income taxes	17		(27)
Changes in operating assets and liabilities:
Merchandise inventory	(344)		(5)
Other current assets and other long-term assets	(35)		81
Accounts payable	156		133
Accrued expenses and other current liabilities	29		(11)
Income taxes payable, net of receivables and other tax-related items	50		50
Other long-term liabilities	(18)		(11)
Operating lease assets and liabilities, net	(75)		(147)
Net cash provided by operating activities	870		832
Cash flows from investing activities:
Purchases of property and equipment	(330)		(288)
Net proceeds from sale of building	—		76
Purchases of short-term investments	(343)		—
Proceeds from sales and maturities of short-term investments	97		—
Net proceeds from divestiture activity, net of cash paid	—		9
Net cash used for investing activities	(576)		(203)
Cash flows from financing activities:
Repayments of revolving credit facility	—		(350)
Proceeds from issuances under share-based compensation plans	27		18
Withholding tax payments related to vesting of stock units	(48)		(16)
Cash dividends paid	(169)		(166)
Other	(3)		(2)
Net cash used for financing activities	(193)		(516)
Effect of foreign exchange rate fluctuations on cash, cash equivalents, and restricted cash	(4)		(7)
Net increase in cash, cash equivalents, and restricted cash	97		106
Cash, cash equivalents, and restricted cash at beginning of period	1,901		1,273
Cash, cash equivalents, and restricted cash at end of period	$	1,998	$	1,379
Supplemental disclosure of cash flow information:
Cash paid for interest during the period	$	61	$	72
Cash paid for income taxes during the period, net of refunds	$	173	$	(1)

See Accompanying Notes to Condensed Consolidated Financial Statements

THE GAP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Accounting Policies

Basis of Presentation

In the opinion of The Gap, Inc. (Gap Inc., the “Company,” “we,” and “our”) management, the accompanying unaudited Condensed Consolidated Financial Statements contain all normal and recurring adjustments (except as otherwise disclosed) considered necessary to present fairly our financial position, results of operations, comprehensive income, stockholders' equity, and cash flows as of ~~November~~May 23, ~~2024~~2025 and ~~October~~May 284, ~~2023~~2024 and for all periods presented. The Condensed Consolidated Balance Sheet as of February 31, ~~2024~~2025 has been derived from our audited financial statements.

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission. Accordingly, certain information and disclosures normally included in the notes to the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been omitted from these interim financial statements, although the Company believes that the disclosures made are adequate to make the information not misleading. We suggest that you read these Condensed Consolidated Financial Statements in conjunction with the Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended February 31, ~~2024~~2025.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. ~~Additionally,~~Our ~~these~~most ~~estimates~~significant ~~and~~accounting ~~assumptions~~judgments ~~may change as a result of the impact of global economic conditions such as the uncertainty regarding global inflationary pressures~~include, ~~acts~~but ofare ~~terrorism~~not orlimited ~~war~~to, ~~global~~estimates ~~credit~~ and banking markets, and the geopolitical landscape including new legislation and the potential impacts of recent elections. We will continue to consider the impact of the global economic conditions on the assumptions ~~and estimates~~ used ~~when~~for ~~preparing these Condensed Consolidated Financial Statements including~~ inventory valuation, income taxes and valuation allowances, sales return and bad debt allowances, deferred revenue, and the impairment of long-lived assets. ~~If the global economic conditions change beyond what is currently estimated by management, such future changes may have an adverse impact on the Company's results of operations and financial position.~~

The United States has recently enacted significant changes to its trade policy and imposed substantial tariffs on imported goods from a number of countries. We will continue to consider the impact of these developments on the assumptions and estimates used when preparing our quarterly financial statements.

Restricted Cash

As of ~~November~~May 23, ~~2024~~2025, February 31, ~~2024~~2025, and ~~October~~May 284, ~~2023~~2024, restricted cash primarily included consideration that serves as collateral for our insurance obligations and certain other obligations occurring in the normal course of business. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within our Condensed Consolidated Balance Sheets to the total shown on our Condensed Consolidated Statements of Cash Flows:

($ in millions)	~~November~~May 23,~~2024~~2025		February 31,~~2024~~2025		~~October~~May 284,~~2023~~2024
Cash and cash equivalents, per Condensed Consolidated Balance Sheets	$	1,~~969~~976	$	12,~~873~~335	$	1,~~351~~532
Restricted cash included in other long-term assets	2928		2830		2829
Total cash, cash equivalents, and restricted cash, per Condensed Consolidated Statements of Cash Flows	$	12,~~998~~004	$	12,~~901~~365	$	1,~~379~~561

Accounting Pronouncements

Except as noted below, the Company has considered all recent accounting pronouncements and concluded that there are no recent accounting pronouncements that may have a material impact on our Condensed Consolidated Financial Statements and disclosures, based on current information.

Accounting Pronouncement Recently Adopted

ASU No. 2022-04, Disclosure of Supplier Finance Program Obligations

In September 2022, the Financial Accounting Standards Board ("FASB") issued accounting standards update ("ASU") No. 2022-04, Disclosure of Supplier Finance Program Obligations. The ASU is intended to enhance the transparency of the use of supplier finance programs by requiring additional disclosures about the program’s nature and potential magnitude, including a rollforward of the obligations and activity during the period. The ASU is effective retrospectively for fiscal years and interim periods within those years beginning after December 15, 2022, except for the amendment on rollforward information, which is effective prospectively for fiscal years beginning after December 15, 2023. The ASU does not affect the recognition, measurement, or financial statement presentation of supplier finance program obligations. We adopted the required guidance on January 29, 2023. See Note 12 of Notes to Condensed Consolidated Financial Statements for information regarding our supply chain finance program.

Accounting Pronouncements Not Yet Adopted

ASU No. 2023-07, Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures. The ASU is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The ASU is effective retrospectively for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. We are currently assessing the impact that this ASU will have on the Company's disclosures.

ASU No. 2023-09, Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures. The ASU is intended to improve the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation, as well as income taxes paid disaggregated by jurisdiction. The ASU is effective for annual periods beginning after December 15, 2024 and should be applied on a prospective basis, but retrospective application is permitted. We are currently assessing the impact that this ASU will have on the Company's disclosures.

ASU No. 2024-03, Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses. The ASU is intended to improve financial reporting by requiring disaggregated disclosure of certain costs and expenses. The ASU is effective for fiscal years beginning after December 15, 2026 and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The ASU may be applied on either a prospective or retrospective basis. We are currently assessing the impact that this ASU will have on the Company's disclosures.

Note 2. Revenue

We disaggregate our net sales by channel and also by brand and region. Net sales by region are allocated based on the location of the store where the customer paid for and received the merchandise; the distribution center or store from which the products were shipped; or the region of the franchise or licensing partner.

Net sales disaggregated by channel are as follows:

13 Weeks Ended

~~39 Weeks Ended~~

($ in millions)

~~November~~May 23, ~~2024~~2025

~~October~~May 284, ~~2023~~2024

~~November 2, 2024~~

~~October 28, 2023~~

Store and franchise sales

2,~~289~~107

2,~~331~~106

~~6,871~~

~~6,771~~

Online sales (1)

1,~~540~~356

1,~~436~~282

~~4,066~~

~~3,820~~

Total net sales

3,~~829~~463

3,~~767~~388

~~10,937~~

~~10,591~~

__________

(1)Online sales primarily include sales originating from our online channel including those that are picked up or shipped from stores and net sales from revenue-generating strategic initiatives.

Net sales disaggregated by brand and region are as follows:

($ in millions)	Old Navy Global		Gap Global		Banana Republic Global		Athleta Global		Other (2)		Total
13 Weeks Ended November 2, 2024
13 Weeks Ended May 3, 2025
U.S. (1)	$	1,~~949~~826	$	~~683~~545	$	~~406~~373	$	~~281~~299	$	2122	$	3,~~340~~065
Canada	~~190~~140		9561		4335		98		—		~~337~~244
Other regions	1115		~~121~~118		20		—1		—		~~152~~154
Total	$	21,~~150~~981	$	~~899~~724	$	~~469~~428	$	~~290~~308	$	2122	$	3,~~829~~463

($ in millions)	Old Navy Global		Gap Global		Banana Republic Global		Athleta Global		Other (2)		Total
13 Weeks Ended October 28, 2023
13 Weeks Ended May 4, 2024
U.S. (1)	$	1,~~917~~761	$	~~664~~513	$	~~398~~383	$	~~267~~318	$	1514	$	32,~~261~~989
Canada	~~193~~146		9666		4236		10		—		~~341~~258
Other regions	169		~~127~~110		2021		21		—		~~165~~141
Total	$	21,~~126~~916	$	~~887~~689	$	~~460~~440	$	~~279~~329	$	1514	$	3,~~767~~388

__________

($ in millions)	Old Navy Global		Gap Global		Banana Republic Global		Athleta Global		Other (2)		Total
39 Weeks Ended November 2, 2024
U.S. (1)	$	5,663	$	1,775	$	1,203	$	926	$	49	$	9,616
Canada	495		238		122		29		—		884
Other regions	31		341		63		2		—		437
Total	$	6,189	$	2,354	$	1,388	$	957	$	49	$	10,937

($ in millions)	Old Navy Global		Gap Global		Banana Republic Global		Athleta Global		Other (2)		Total
39 Weeks Ended October 28, 2023
U.S. (1)	$	5,353	$	1,702	$	1,187	$	903	$	29	$	9,174
Canada	503		233		122		33		—		891
Other regions	59		399		63		5		—		526
Total	$	5,915	$	2,334	$	1,372	$	941	$	29	$	10,591

(1)U.S. includes the United States and Puerto Rico.

(2)Primarily consists of net sales from revenue-generating strategic initiatives.

We defer revenue when cash payments are received in advance of performance for unsatisfied obligations related to our gift cards, licensing agreements, outstanding loyalty points, and reimbursements of loyalty program ~~discounts~~rewards associated with our credit card agreement. For the 13 weeks ended ~~November~~May 23, ~~2024~~2025, the opening balance of deferred revenue for these obligations was $~~280~~273 million, of which $9594 million was recognized as revenue during the period. ~~For the 39 weeks ended November 2, 2024, the opening balance of deferred revenue for these obligations was $337 million, of which $209 million was recognized as revenue during the period.~~ The closing balance of deferred revenue for these obligations was $~~260~~249 million as of ~~November~~May 23, ~~2024~~2025.

For the 13 weeks ended ~~October~~May 284, ~~2023~~2024, the opening balance of deferred revenue for these obligations was $~~327~~337 million, of which $~~119~~123 million was recognized as revenue during the period. ~~For the 39 weeks ended October 28, 2023, the opening balance of deferred revenue for these obligations was $354 million, of which $227 million was recognized as revenue during the period.~~ The closing balance of deferred revenue for these obligations was $~~315~~310 million as of ~~October~~May 284, ~~2023~~2024.

In April 2021, the Company entered into agreements with Barclays and Mastercard relating to a long-term credit card program. The Company received an upfront payment of $60 million related to the agreements prior to the program launch in May 2022, which is being recognized as revenue over the term of the agreements. We also receive revenue sharing from our credit card agreement for private label and co-branded credit cards.

Note 3. Income Taxes

The effective income tax rate was 2426.16 percent for the 13 weeks ended ~~November~~May 23, ~~2024~~2025, compared with 1224.80 percent for the 13 weeks ended ~~October~~May 284, ~~2023~~2024. The increase is primarily due to ~~changes~~less infavorable ~~valuation~~impacts ~~allowances~~of stock-based compensation, as well as changes in the ~~prior~~amount ~~year~~and mix of jurisdictional earnings.

The effective income tax rate was 26.2 percent for the 39 weeks ended November 2, 2024, compared with 6.2 percent for the 39 weeks ended October 28, 2023. The increase is primarily due to tax benefits recognized in the prior year from a U.S. transfer pricing settlement related to our sourcing activities, changes in valuation allowances in the prior year, current year increases to certain income tax reserves, and changes in the amount and mix of jurisdictional earnings, partially offset by a favorable impact from stock-based compensation.7

Note 4. Debt and Credit Facilities

Long-term debt recorded on the Condensed Consolidated Balance Sheets consists of the following:

($ in millions)	~~November~~May 23,~~2024~~2025		February 31,~~2024~~2025		~~October~~May 284,~~2023~~2024
2029 Notes	$	750	$	750	$	750
2031 Notes	750		750		750
Less: Unamortized debt issuance costs	(1110)		(1210)		(1211)
Total long-term debt	$	1,~~489~~490	$	1,~~488~~490	$	1,~~488~~489

The scheduled maturity of the Senior Notes is as follows:


Scheduled Maturity ($ in millions)	Principal		Interest Rate		Interest Payments

October 1, 2029 (1)	$	750	3.625	%	Semi-Annual
October 1, 2031 (2)	750		3.875	%	Semi-Annual
Total issuance	$	1,500

__________

(1)On or after October 1, 2024, includes an option to redeem the 2029 Notes, in whole or in part at any time, at stated redemption prices.

(2)Includes an option to redeem the 2031 Notes, in whole or in part at any time, subject to a make-whole premium, prior to October 1, 2026. On or after October 1, 2026, includes an option to redeem the 2031 Notes, in whole or in part at any time, at stated redemption prices.

We have $1.5 billion aggregate principal amount of 3.625 percent senior notes due 2029 (“2029 Notes”) and 3.875 percent senior notes due 2031 (“2031 Notes”) (the 2029 Notes and the 2031 Notes, collectively, the “Senior Notes”). As of ~~November~~May 23, ~~2024~~2025, the aggregate estimated fair value of the Senior Notes was $1.3134 billion and was based on the quoted market prices for each of the Senior Notes (level 1 inputs) as of the last business day of the fiscal quarter. The aggregate principal amount of the Senior Notes is recorded in long-term debt on the Condensed Consolidated Balance Sheets, net of the unamortized debt issuance costs.

We also have a senior secured asset-based revolving credit agreement (the "ABL Facility"), which has a $2.2 billion borrowing capacity and generally bears interest at a per annum rate based on Secured Overnight Financing Rate ("SOFR") (subject to a zero floor) plus a margin, depending on borrowing base availability. The ABL Facility is scheduled to expire in July 2027. ~~The~~and ~~ABL Facility~~ is available for working capital, capital expenditures, and other general corporate purposes.

There were no borrowings under the ABL Facility as of ~~November~~May 23, ~~2024~~2025, February 31, ~~2024~~2025, or ~~October~~May 284, ~~2023~~2024.

We also have the ability to issue letters of credit on our ABL Facility. As of ~~November~~May 23, ~~2024~~2025, we had $47 million in standby letters of credit issued under the ABL Facility.

Note 5. Fair Value Measurements

The Company measures certain financial assets and liabilities at fair value on a recurring basis. The Company categorizes financial assets and liabilities recorded at fair value based upon a three-level hierarchy that considers the related valuation techniques.

There were no material purchases, sales, issuances, or settlements related to recurring level 3 measurements for the 13 ~~and 39~~ weeks ended ~~November~~May 23, ~~2024~~2025 or ~~October~~May 284, ~~2023~~2024.

Financial assets and liabilities measured at fair value on a recurring basis and cash equivalents are as follows:

			Fair Value Measurements at Reporting Date Using
($ in millions)	~~November~~May 23, ~~2024~~2025		Quoted Prices inActive Markets forIdentical Assets(Level 1)		Significant OtherObservableInputs(Level 2)		SignificantUnobservableInputs(Level 3)
Assets:
Cash equivalents	$	8224	$	1223	$	71	$	—
Short-term investments	~~250~~244		~~130~~116		~~120~~128		—
Derivative financial instruments	195		—		195		—
Deferred compensation plan assets	3839		3839		—		—
Other assets	43		—		—		43
Total	$	~~319~~515	$	~~169~~378	$	~~146~~134	$	43
Liabilities:
Derivative financial instruments	$	114	$	—	$	114	$	—
			Fair Value Measurements at Reporting Date Using
($ in millions)	February 31, ~~2024~~2025		Quoted Prices inActive Markets forIdentical Assets(Level 1)		Significant OtherObservableInputs(Level 2)		SignificantUnobservableInputs(Level 3)
Assets:
Cash equivalents	$	1310	$	—302	$	18	$	—
Derivative financial instruments	7		—		7		—
Short-term investments	253		132		121		—
Deferred compensation plan assets	31		31		—		—
Derivative financial instruments	33		—		33		—
Other assets	4		—		—		4
Deferred compensation plan assets	36		36		—		—
Total	$	43	$	31	$	8	$	4
Other assets	3		—		—		3
Total	$	635	$	470	$	162	$	3
Liabilities:
Derivative financial instruments	$	8—	$	—	$	8—	$	—
			Fair Value Measurements at Reporting Date Using
($ in millions)	~~October~~May 284, ~~2023~~2024		Quoted Prices inActive Markets forIdentical Assets(Level 1)		Significant OtherObservableInputs(Level 2)		SignificantUnobservableInputs(Level 3)
Assets:
Cash equivalents	$	153	$	—35	$	118	$	—
Derivative financial instruments	34		—		34		—
Short-term investments	199		87		112		—
Deferred compensation plan assets	31		31		—		—
Derivative financial instruments	14		—		14		—
Deferred compensation plan assets	36		36		—		—
Other assets	4		—		—		4
Total	$	70306	$	31158	$	35144	$	4
Liabilities:
Derivative financial instruments	$	—	$	—	$	—	$	—

We have highly liquid fixed and variable income investments classified as cash equivalents and short-term investments. All highly liquid investments with original maturities of three months or less at the time of purchase are classified as cash and cash equivalents on the Condensed Consolidated Balance Sheets. Our cash equivalents are ~~placed~~comprised ~~primarily~~of inmoney ~~debt~~market ~~securities~~funds ~~which~~and ~~are~~time deposits recorded at amortized cost, which approximates fair value, ~~using~~as ~~market~~well ~~prices~~as ~~for~~debt ~~identical~~securities orrecorded ~~similar~~at ~~assets~~fair ~~and~~value ~~time~~using ~~deposits~~market ~~which~~prices ~~are~~for ~~recorded~~identical ator ~~amortized~~similar ~~cost~~assets. We also have highly liquid investments with original maturities of greater than three months and less than two years that are classified as short-term investments on the Condensed Consolidated Balance ~~Sheet~~Sheets. These debt securities are also recorded at fair value using market prices for identical or similar assets.

There were no material realized or unrealized gains or losses or impairment charges related to short-term investments during the 13 ~~and 39~~ weeks ended ~~November~~May 23, 2025 or May 4, 2024.

Derivative financial instruments primarily include foreign exchange forward contracts. See Note 6 of Notes to Condensed Consolidated Financial Statements for information regarding currencies hedged against the U.S. dollar.

10We maintain the Gap Inc. Deferred Compensation Plan (“DCP”), which allows eligible employees to defer base compensation and bonus up to a maximum percentage, and non-employee directors to defer receipt of a portion of their Board fees. Plan investments are directed by participants and are recorded at market value and designated for the DCP. The fair value of the Company’s DCP assets is determined based on quoted market prices, and the assets are recorded in other long-term assets on the Condensed Consolidated Balance Sheets.

We maintain the Gap, Inc. Deferred Compensation Plan (“DCP”), which allows eligible employees to defer base compensation and bonus up to a maximum percentage, and non-employee directors to defer receipt of a portion of their Board fees. Plan investments are directed by participants and are recorded at market value and designated for the DCP. The fair value of the Company’s DCP assets is determined based on quoted market prices, and the assets are recorded in other long-term assets on the Condensed Consolidated Balance Sheets.

Nonfinancial Assets

We review the carrying amount of long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The fair value of the long-lived assets is determined using level 3 inputs and based on discounted future cash flows of the asset or asset group using a discount rate commensurate with the risk. The asset group is defined as the lowest level for which identifiable cash flows are available and largely independent of the cash flows of other groups of assets, which for our retail stores is at the store level.

There were no material impairment charges recorded for long-lived assets during the 13 ~~and 39~~ weeks ended ~~November~~May 23, ~~2024~~2025 or ~~October~~May 284, ~~2023~~2024.

We review the carrying amount of goodwill and other indefinite-lived intangible assets for impairment annually and whenever events or changes in circumstances indicate that it is more likely than not that the carrying amount may not be recoverable.

There were no impairment charges recorded for goodwill or other indefinite-lived intangible assets for the 13 ~~and 39~~ weeks ended ~~November~~May 23, ~~2024~~2025 or ~~October~~May 284, ~~2023~~2024.

Note 6. Derivative Financial Instruments

We operate in foreign countries, which exposes us to market risk associated with foreign currency exchange rate fluctuations. We use derivative financial instruments to manage our exposure to foreign currency exchange rate risk and do not enter into derivative financial contracts for trading purposes. Consistent with our risk management guidelines, we hedge a portion of our transactions related to merchandise purchases for foreign operations and certain intercompany transactions using foreign exchange forward contracts. These contracts are entered into with large, reputable financial institutions that are monitored for counterparty risk. The currencies hedged against changes in the U.S. dollar are the Canadian dollar, Japanese yen, British pound, New Taiwan dollar, and Euro. Cash flows from derivative financial instruments are classified as cash flows from operating activities on the Condensed Consolidated Statements of Cash Flows.

Derivative financial instruments are recorded at fair value on the Condensed Consolidated Balance Sheets as other current assets, other long-term assets, accrued expenses and other current liabilities, or other long-term liabilities.

Cash Flow Hedges

We designate foreign exchange forward contracts used to hedge forecasted merchandise purchases and related costs denominated in U.S. dollars made by our international subsidiaries whose functional currencies are their local currencies as cash flow hedges. The foreign exchange forward contracts entered into to hedge forecasted merchandise purchases and related costs generally have terms of up to 24 months. The effective portion of the gain or loss on the derivative financial instruments is reported as a component of other comprehensive income (loss) and is recognized into net income during the period in which the underlying transaction impacts the Condensed Consolidated Statements of Operations.

Other Derivatives Not Designated as Hedging Instruments

We use foreign exchange forward contracts to hedge our market risk exposure associated with foreign currency exchange rate fluctuations for certain intercompany balances denominated in currencies other than the functional currency of the entity with the intercompany balance. The gain or loss on the derivative financial instruments that represent economic hedges, as well as the remeasurement impact of the underlying intercompany balances, is recorded in operating expenses on the Condensed Consolidated Statements of Operations in the same period and generally offset each other.

1110

Outstanding Notional Amounts

We had foreign exchange forward contracts outstanding in the following notional amounts:

($ in millions)

~~November~~May 23,~~2024~~2025

February 31,~~2024~~2025

~~October~~May 284,~~2023~~2024

Derivatives designated as cash flow hedges

~~458~~400

~~381~~363

~~357~~323

Derivatives not designated as hedging instruments

~~427~~434

~~568~~419

~~526~~408

Total

~~885~~834

~~949~~782

~~883~~731

Quantitative Disclosures about Derivative Financial Instruments

The fair values of foreign exchange forward contracts are as follows:

($ in millions)	~~November~~May 23,~~2024~~2025		February 31,~~2024~~2025		~~October~~May 284,~~2023~~2024
Derivatives designated as cash flow hedges:
Other current assets	$	104	$	620	$	139
Other long-term assets	1		—		2
Accrued expenses and other current liabilities	3		—		—
Accrued expenses and other current liabilities	—		2		—
Derivatives not designated as hedging instruments:
Other current assets	81		113		195
Accrued expenses and other current liabilities	111		6—		—
Total derivatives in an asset position	$	195	$	733	$	3414
Total derivatives in a liability position	$	114	$	8—	$	—

The majority of the unrealized gains and losses from designated cash flow hedges as of ~~November~~May 23, ~~2024~~2025 will be recognized in income within the next 12 months at the then-current values, which may differ from the fair values as of ~~November~~May 23, ~~2024~~2025 shown above.

Our foreign exchange forward contracts are subject to master netting arrangements with each of our counterparties and such arrangements are enforceable in the event of default or early termination of the contract. We do not elect to offset the fair values of our derivative financial instruments on the Condensed Consolidated Balance Sheets, and as such, the fair values shown above represent gross amounts. The amounts subject to enforceable master netting arrangements were not material for all periods presented.

See Note 5 of Notes to Condensed Consolidated Financial Statements for disclosures on the fair value measurements of our derivative financial instruments.

The pre-tax amounts recognized in net income related to derivative instruments are as follows:

	Location and Amount of GainRecognized in Net Income
	Location and Amount of (Gain) LossRecognized in Net Income
	13 Weeks EndedNovember 2, 2024				13 Weeks EndedOctober 28, 2023
	13 Weeks EndedMay 3, 2025				13 Weeks EndedMay 4, 2024
($ in millions)	Cost of goods sold and occupancy expenses		Operating expenses		Cost of goods sold and occupancy expenses		Operating expenses
Total amount of expense line items presented in the Condensed Consolidated Statements of Operations in which the effects of derivatives are recorded	$	2,~~194~~015	$	1,~~280~~188	$	21,~~211~~991	$	1,~~306~~192
Gain recognized in net income
(Gain) loss recognized in net income
Derivatives designated as cash flow hedges	(45)		—		(62)		—
Derivatives not designated as hedging instruments	—		~~(4)~~21		—		(277)
Total gain recognized in net income	$	(4)	$	(4)	$	(6)	$	(27)
Total (gain) loss recognized in net income	$	(5)	$	21	$	(2)	$	(7)

1211

	Location and Amount of Gain Recognized in Net Income
	39 Weeks EndedNovember 2, 2024				39 Weeks EndedOctober 28, 2023
($ in millions)	Cost of goods sold and occupancy expense		Operating expenses		Cost of goods sold and occupancy expense		Operating expenses
Total amount of expense line items presented in the Condensed Consolidated Statements of Operations in which the effects of derivatives are recorded	$	6,322	$	3,762	$	6,488	$	3,757
Gain recognized in net income
Derivatives designated as cash flow hedges	(10)		—		(13)		—
Derivatives not designated as hedging instruments	—		(17)		—		(25)
Total gain recognized in net income	$	(10)	$	(17)	$	(13)	$	(25)

Note 7. Share Repurchases

InShare ~~February 2019, the Company's Board of Directors (the "Board") approved a $1.0 billion share~~ repurchase ~~authorization~~activity ~~(the~~is "February 2019 repurchase program"). There were no shares repurchased, excluding shares withheld to settle employee tax withholding payments related to the vesting of stock units, during the 13 and 39 weeks ended November 2, 2024 and October 28, 2023. The February 2019 repurchase program had $476 million remaining as ~~of November 2, 2024. All common stock repurchased is immediately retired.~~follows:


	13 Weeks Ended
($ and shares in millions except average per share cost)	May 3, 2025		May 4, 2024
Number of shares repurchased (1)	4		—
Total cost	$	70	$	—
Average per share cost including commissions	$	19.26	$	—

__________

(1)Excludes shares withheld to settle employee tax withholding payments related to the vesting of stock units.

In February 2019, the Company's Board of Directors (the "Board") approved a $1.0 billion share repurchase authorization (the "February 2019 repurchase program"). The February 2019 repurchase program had $331 million remaining as of May 3, 2025. All common stock repurchased is immediately retired.

Note 8. Earnings Per Share

Weighted-average number of shares used for earnings per share is as follows:

13 Weeks Ended

~~39 Weeks Ended~~

(shares in millions)

~~November~~May 23,~~2024~~2025

~~October~~May 284,~~2023~~2024

~~November 2,2024~~

~~October 28,2023~~

Weighted-average number of shares - basic

~~377~~375

~~371~~374

~~376~~

~~369~~

Common stock equivalents

Weighted-average number of shares - diluted

~~383~~382

~~375~~383

~~383~~

~~373~~

The anti-dilutive shares related to stock options and other stock awards excluded from the computation of weighted-average number of shares – diluted were 2 million and 56 million for the 13 weeks ended ~~November~~May 23, ~~2024~~2025 and ~~October~~May 284, ~~2023, respectively, and 3 million and 6 million for the 39 weeks ended November 2,~~ 2024 ~~and October 28~~, ~~2023,~~ respectively, as their inclusion would have an anti-dilutive effect on earnings per share.

Note 9. Commitments and Contingencies

We are a party to a variety of contractual agreements under which we may be obligated to indemnify the other party for certain matters. These contracts primarily relate to our commercial contracts, operating leases, trademarks, intellectual property, financial agreements, and various other agreements. Under these contracts, we may provide certain routine indemnifications relating to representations and warranties (e.g., ownership of assets, environmental or tax indemnifications), or personal injury matters. The terms of these indemnifications range in duration and may not be explicitly defined. Generally, the maximum obligation under such indemnifications is not explicitly stated, and as a result, the overall amount of these obligations cannot be reasonably estimated. Historically, we have not made significant payments for these indemnifications. We believe that if we were to incur a loss in any of these matters, the loss would not have a material effect on our Condensed Consolidated Financial Statements taken as a whole.

As a multinational company, we are subject to various proceedings, lawsuits, disputes, and claims ("Actions") arising in the ordinary course of our business. Many of these Actions raise complex factual, tax, and legal issues and are subject to uncertainties. As of ~~November~~May 23, ~~2024~~2025, Actions filed against us included commercial, intellectual property, customer, employment, securities, and data privacy claims, including class action lawsuits. The plaintiffs in some Actions seek unspecified damages or injunctive relief, or both. Actions are in various procedural stages and some are covered in part by insurance. As of ~~November~~May 23, ~~2024~~2025, February 31, ~~2024~~2025, and ~~October~~May 284, ~~2023~~2024, we recorded a liability for an estimated loss if the outcome of an Action is expected to result in a loss that is considered probable and reasonably estimable. The liability recorded was not material for any individual Action or in total for all periods presented. Subsequent to ~~November~~May 23, ~~2024~~2025, and through the filing date of this Quarterly Report on Form 10-Q, no information has become available that indicates a change is required that would be material to our Condensed Consolidated Financial Statements taken as a whole.

We cannot predict with assurance the outcome of Actions brought against us. However, we do not believe that the outcome of any current Action would have a material effect on our Condensed Consolidated Financial Statements taken as a whole.

Note 10. Segment Information

We identify our operating segments according to how our business activities are managed and evaluated. As of ~~November~~May 23, ~~2024~~2025, our operating segments included: Old Navy Global, Gap Global, Banana Republic Global, and Athleta Global. Each of our brands serves customer demand through our store and franchise channel and our online channel, leveraging our omni-channel capabilities that allow customers to shop seamlessly across all of our brands. Additionally, our products, suppliers, customers, methods of distribution, and regulatory environment are similar across our brands. We have determined that each of our operating segments share similar ~~economic~~qualitative and ~~other~~economic ~~qualitative~~ characteristics, and therefore the results of our operating segments are aggregated into one reportable segment as of ~~November~~May 23, ~~2024~~2025. We continually monitor and review our segment reporting structure in accordance with authoritative guidance to determine whether any changes have occurred that would impact our reportable segments.

Gap Inc.’s chief operating decision maker ("CODM") is our President and Chief Executive Officer. The CODM reviews measures of segment profit or loss by comparing budgeted versus actual and forecasted results, for purposes of assessing performance, allocating resources, and making decisions. The measure of segment assets is reported on the Condensed Consolidated Balance Sheets in total.

The following table presents information for segment profit and significant expenses:


	13 Weeks Ended
($ in millions)	May 3, 2025		May 4, 2024
Net sales	$	3,463	$	3,388
Cost of goods sold	1,554		1,521
Occupancy expenses (1)	461		470
Operating expenses (2)	1,188		1,192
Operating income	$	260	$	205

__________

(1)Occupancy expenses include lease and other occupancy related cost, depreciation, and amortization related to our store operations, distribution centers, information technology, and certain corporate functions.

(2)Operating expenses primarily include payroll and benefits expenses, advertising expenses, information technology expenses and maintenance costs, and other administrative expenses.

See Note 2 of Notes to Condensed Consolidated Financial Statements for disaggregation of revenue by channel and by brand and region.

Note 11. Divestitures

On November 7, 2022, we signed agreements to transition our Gap China and Gap Taiwan ("Gap Greater China") operations to a third party, Baozun Inc. ("Baozun"), to operate Gap Greater China stores and the in-market website as a franchise partner, subject to regulatory approvals and closing conditions. On January 31, 2023, the Gap China transaction closed with Baozun. The ~~impact upon divestiture was not material to our results of operations for the 39 weeks ended October 28, 2023. The~~ Gap Taiwan operations will continue to operate as usual until regulatory approvals and closing conditions are met.

Note 12. Supply Chain Finance Program

Our voluntary supply chain finance ("SCF") program provides certain suppliers with the opportunity to sell their receivables due from us to participating financial institutions at the sole discretion of both the suppliers and the financial institutions. We are not a party to the agreements between our suppliers and the financial institutions and our payment terms are not impacted by whether a supplier participates in the SCF program.

The Company's outstanding obligations under the SCF program were $~~350~~313 million, $~~373~~387 million, and $~~344~~324 million as of ~~November~~May 23, ~~2024~~2025, February 31, ~~2024~~2025, and ~~October~~May 284, ~~2023~~2024, respectively, and were included in accounts payable on the Condensed Consolidated Balance Sheets.

1413

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

OUR BUSINESS

We are a ~~collection~~house of ~~lifestyle~~iconic brands offering apparel, accessories, and personal care products for men, women, and children under the Old Navy, Gap, Banana Republic, and Athleta brands. WeOur ~~have~~products ~~Company-operated~~are ~~stores~~available to customers both in ~~the~~stores ~~United~~and ~~States~~online, ~~Canada~~through Company-operated and franchise stores, ~~Japan~~websites, and ~~Taiwan~~third-party arrangements. ~~Our~~We ~~products~~have ~~are~~Company-operated ~~available~~stores toin ~~customers~~the ~~online~~United ~~through~~States, ~~Company-owned~~Canada, ~~websites~~Japan, and ~~through third-party arrangements~~Taiwan. We also have franchise agreements to operate Old Navy, Gap, Banana Republic, and Athleta throughout Asia, Europe, Latin America, the Middle East, and Africa. Under these agreements, third parties operate, or will operate, stores and websites that sell apparel and related products under our brand names. In addition to operating in the specialty, outlet, online, and franchise channels, we use our omni-channel capabilities to bridge the digital world and physical stores. toThe ~~further enhance our~~ shopping experience ~~for~~is ~~our~~further ~~customers.~~enhanced ~~Our~~by our omni-channel services, including buy online pick-up in store, order-in-store, ~~find-in-store,~~ and ship-from-store, as well as enhanced mobile-enabled experiences, ~~are~~which ~~tailored~~allow ~~uniquely~~our customers to shop seamlessly across our ~~collection~~brands ofand channels. Our brands have shared investments in supply chain and inventory management, which allows us to optimize efficiency and responsiveness in our operations. Most of the products sold under our brand names are designed by us and manufactured by independent sources.

OVERVIEW

Financial results for the ~~third~~first quarter of fiscal ~~2024~~2025 are as follows:

•Net sales for the ~~third~~first quarter of fiscal ~~2024~~2025 increased 2 percent compared with the ~~third~~first quarter of fiscal ~~2023~~2024.

•Store and franchise sales for the ~~third~~first quarter of fiscal ~~2024~~2025 ~~decreased~~were 2flat ~~percent~~ compared with the ~~third~~first quarter of fiscal ~~2023~~2024, and online sales for the ~~third~~first quarter of fiscal ~~2024~~2025 increased 76 percent compared with the ~~third~~first quarter of fiscal ~~2023~~2024.

•Gross profit for the ~~third~~first quarter of fiscal ~~2024~~2025 was $1.6445 billion compared with $1.5640 billion for the ~~third~~first quarter of fiscal ~~2023~~2024. Gross margin for the ~~third~~first quarter of fiscal ~~2024~~2025 was 4241.78 percent compared with 41.32 percent for the ~~third~~first quarter of fiscal ~~2023~~2024.

•Operating income for the ~~third~~first quarter of fiscal ~~2024~~2025 was $~~355~~260 million compared with $~~250~~205 million for the ~~third~~first quarter of fiscal ~~2023~~2024.

•The effective income tax rate for the ~~third~~first quarter of fiscal ~~2024~~2025 was 2426.16 percent compared with 1224.80 percent for the ~~third~~first quarter of fiscal ~~2023~~2024.

•Net income for the ~~third~~first quarter of fiscal ~~2024~~2025 was $~~274~~193 million compared with $~~218~~158 million for the ~~third~~first quarter of fiscal ~~2023~~2024.

•Diluted earnings per share was $0.7251 for the ~~third~~first quarter of fiscal ~~2024~~2025 compared with $0.5841 for the ~~third~~first quarter of fiscal ~~2023~~2024.

•Merchandise inventory as of the ~~third~~first quarter of fiscal ~~2024~~2025 ~~decreased~~increased 27 percent compared with the ~~third~~first quarter of fiscal ~~2023~~2024.

WeWhile ~~are~~we continue to transform, we remain focused on the following strategic priorities in the near term:

•maintaining and building upon financial and operational rigor, through an optimized cost structure and disciplined inventory management;

•reinvigorating our brands to drive relevance and an engaging omni-channel experience;

•strengthening and evolving our operating platform with a digital-first mindset to drive scale and efficiency;

•energizing our culture by attracting and retaining strong talent; and

•continuing to integrate ~~social and environmental~~ sustainability into business practices to support long-term growth.

15Macroeconomic factors, including uncertainty surrounding global geopolitical instability, inflationary pressures, foreign currency fluctuations, and changes in interest rates, duties, tariffs, tax laws, and other restrictions as a result of government fiscal, monetary, trade, and tax policies, continue to create a complex and challenging retail environment. The United States has recently enacted significant changes to its trade policy and imposed substantial tariffs on imported goods from a number of countries. Certain of these tariffs are currently paused. Changes in U.S. trade policy and uncertainty surrounding tariff rates have contributed to overall macroeconomic volatility, and the eventual outcome of the trade policy may increase the cost of our merchandise and therefore negatively impact our gross margins in future quarters.

The macroeconomic environment has had and may continue to have an impact on consumer behavior, and we anticipate continued uncertainty related to the macroeconomic environment during fiscal 2025. We will continue to monitor macroeconomic conditions and evaluate potential mitigating actions. For additional information on risks related to macroeconomic conditions and our supply chain, see the sections entitled “Risk Factors—Risks Related to Macroeconomic Conditions—Global economic conditions have and could continue to adversely affect our business, financial condition, and results of operations” and “Risk Factors—Risks Related to Our Business Operations—Trade matters may disrupt our supply chain,” in Part II, Item 1A, Risk Factors, of this Form 10-Q.

RESULTS OF OPERATIONS

Net Sales

See Note 2 of Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q, for net sales disaggregation.

Comparable Sales ("Comp Sales")

~~Fiscal~~Comp ~~2024~~Sales ~~consists~~include the results of 52Company-operated ~~weeks~~stores ~~versus~~and 53sales ~~weeks~~through inour ~~fiscal~~online ~~2023~~channel. ~~Due~~The tocalculation ~~the~~of ~~53rd week in fiscal 2023, in order to maintain consistency,~~ Comp Sales ~~for~~excludes the ~~third~~results ~~quarter~~ of ~~fiscal 2024 and~~ the ~~first~~franchise ~~three quarters of fiscal 2024 are compared to the 13~~ and 39our ~~weeks~~licensing ~~ended November 4, 2023~~business.

Comp Sales include the results of Company-operated stores and sales through our online channel. The calculation of Comp Sales excludes the results of the franchise and licensing business.

A store is included in the Comp Sales calculations when it has been open and operated by the Company for at least one year and the selling square footage has not changed by 15 percent or more within the past year. A store is included in the Comp Sales calculations on the first day it has comparable prior year sales. Stores in which the selling square footage has changed by 15 percent or more as a result of a remodel, expansion, or reduction are excluded from the Comp Sales calculations until the first day they have comparable prior year sales.

A store is considered non-comparable ("Non-comp") when it has been open and operated by the Company for less than one year or has changed its selling square footage by 15 percent or more within the past year.

A store is considered "Closed" if it is temporarily closed for three or more full consecutive days or it is permanently closed. When a temporarily closed store reopens, the store will be placed in the Comp/Non-comp status it was in prior to its closure. If a store was in Closed status for three or more days in the prior year, the store will be in Non-comp status for the same days the following year.

Current year foreign exchange rates are applied to both current year and prior year Comp Sales to achieve a consistent basis for comparison.

The percentage change in Comp Sales by global brand and for The Gap, Inc., as compared with the preceding year, is as follows:

	13 Weeks Ended				~~39 Weeks Ended~~
	November 2,2024		October 28,2023		November 2,2024		October 28,2023
	May 3,2025		May 4,2024
Old Navy Global	—3	%	13	%	3	%	~~(2)~~	%
Gap Global	35	%	~~(1)~~3	%	3	%	—	%
Banana Republic Global	~~(1)~~—	%	~~(8)~~1	%	—	%	~~(8)~~	%
Athleta Global	5(8)	%	~~(19)~~5	%	1	%	~~(13)~~	%
The Gap, Inc.	12	%	~~(2)~~3	%	2	%	~~(3)~~	%

1615

Store count, ~~openings,~~net openings/closings, and square footage for our stores are as follows:

	February 3, 2024	39 Weeks Ended November 2, 2024		November 2, 2024
	February 1, 2025	13 Weeks EndedMay 3, 2025	May 3, 2025
	Number ofStore Locations	Net Number ~~ofStores~~of ~~Opened~~StoresOpened/(Closed)	Number ~~ofStores~~ofStore ~~Closed~~Locations	Square Footage(in millions)	~~Number ofStore Locations~~		~~Square Footage(in millions)~~
Old Navy North America	1,~~243~~249	19(3)	71,246	19.7	~~1,255~~		~~19.9~~
Gap North America	~~472~~453	3—	14453	4.8	~~461~~		~~4.9~~
Gap Asia	~~134~~122	—2	9124	1.1	~~125~~		~~1.1~~
Banana Republic North America	~~400~~380	3(8)	10372	3.1	~~393~~		~~3.3~~
Banana Republic Asia	4342	2(1)	541	0.1	40		~~0.1~~
Athleta North America	~~270~~260	2—	2260	1.1	~~270~~		~~1.1~~
Company-operated stores total	2,~~562~~506	29(10)	472,496	29.9	~~2,544~~		~~30.4~~
Franchise	998	121	60		1,059		N/A
	February 3, 2024	13 Weeks EndedMay 4, 2024	May 4, 2024
Total	3,560	150	107		3,603		30.4
	Number ofStore Locations	Net Number of StoresOpened/(Closed)	Number ofStore Locations	Square Footage(in millions)
Increase (decrease) over prior year					2.0	%	(1.6)	%
Old Navy North America	1,243	1	1,244	19.8
	January 28, 2023	39 Weeks Ended October 28, 2023		October 28, 2023
Gap North America	472	(6)	466	4.9
	Number ofStore Locations	Number ofStores Opened	Number ofStores Closed		Number ofStore Locations		Square Footage(in millions)
Gap Asia	134	(2)	132	1.2
Old Navy North America	1,238	24	11		1,251		19.9
Banana Republic North America	400	(3)	397	3.3
Gap North America	493	1	14		480		5.1
Banana Republic Asia	43	—	43	0.2
Gap Asia (1)	232	1	7		137		1.2
Athleta North America	270	2	272	1.1
Banana Republic North America	419	2	13		408		3.4
Company-operated stores total	2,562	(8)	2,554	30.5
Banana Republic Asia	46	4	2		48		0.2
Athleta North America	257	24	7		274		1.1
Company-operated stores total	2,685	56	54		2,598		30.9
Franchise (1)	667	219	85		935		N/A
Total	3,352	275	139		3,533		30.9
Increase (decrease) over prior year					4.5	%	(4.6)	%

__________

(1)The 89 Gap China stores that were transitioned to Baozun during the period are not included as store closures or openings for Company-operated and Franchise store activity. The ending balance for Gap Asia excludes Gap China stores and the ending balance for Franchise includes Gap China locations transitioned during the period.

Outlet and factory stores are reflected in each of the respective brands.

17As of May 3, 2025 and May 4, 2024, the Company's franchise partners operated approximately 1,000 franchise stores.

Net Sales

Our net sales increased $6275 million, or 2 percent, during the ~~third~~first quarter of fiscal ~~2024~~2025 compared with the ~~third~~first quarter of fiscal ~~2023~~2024, driven primarily by an increase in online sales. ~~Our net sales increased $346 million, or 3 percent, during the first three quarters of fiscal 2024 compared with the first three quarters of fiscal 2023, driven primarily by an increase in Comp Sales.~~

Cost of Goods Sold and Occupancy Expenses

	13 Weeks Ended						~~39 Weeks Ended~~
($ in millions)	~~November~~May 23,~~2024~~2025			~~October~~May 284,~~2023~~2024			~~November 2,2024~~			~~October 28,2023~~
Cost of goods sold and occupancy expenses	$	2,~~194~~015		$	21,~~211~~991		$	~~6,322~~		$	~~6,488~~
Gross profit	$	1,~~635~~448		$	1,~~556~~397		$	~~4,615~~		$	~~4,103~~
Cost of goods sold and occupancy expenses as a percentage of net sales	5758.32		%	58.78		%	~~57.8~~		%	~~61.3~~		%
Gross margin	4241.78		%	41.32		%	~~42.2~~		%	~~38.7~~		%

Cost of goods sold and occupancy expenses decreased 10.46 percentage points as a percentage of net sales in the ~~third~~first quarter of fiscal ~~2024~~2025 compared with the ~~third~~first quarter of fiscal ~~2023~~2024.

•Cost of goods sold ~~decreased~~was ~~0.9~~flat ~~percentage points~~ as a percentage of net sales in the ~~third~~first quarter of fiscal ~~2024~~2025 compared with the ~~third~~first quarter of fiscal ~~2023,~~2024. ~~primarily~~Changes ~~driven~~in byU.S. ~~disciplined~~trade ~~inventory~~policy ~~management.~~and ~~The~~uncertainty ~~impact~~surrounding oftariff ~~commodity~~rates ~~costs~~have ~~was~~contributed ~~relatively~~to ~~flat~~overall ~~for~~macroeconomic volatility, and the ~~third~~eventual ~~quarter~~outcome of ~~fiscal~~the ~~2024~~trade ~~compared~~policy ~~with~~may ~~the~~increase ~~third~~cost ~~quarter~~ of ~~fiscal~~goods ~~2023.~~sold and therefore negatively impact our gross margins in future quarters.

•Occupancy expenses decreased 0.56 percentage points as a percentage of net sales in the ~~third~~first quarter of fiscal ~~2024~~2025 compared with the ~~third~~first quarter of fiscal ~~2023~~2024, primarily driven by an increase in online sales without a corresponding increase in occupancy expenses.

Cost of goods sold and occupancy expenses decreased 3.5 percentage points as a percentage of net sales in the first three quarters of fiscal 2024 compared with the first three quarters of fiscal 2023.

•Cost of goods sold decreased 2.8 percentage points as a percentage of net sales in the first three quarters of fiscal 2024 compared with the first three quarters of fiscal 2023, primarily driven by lower commodity costs and improved promotional activity.

•Occupancy expenses decreased 0.7 percentage points as a percentage of net sales in the first three quarters of fiscal 2024 compared with the first three quarters of fiscal 2023, primarily driven by an increase in net sales without a corresponding increase in occupancy expenses.

Operating Expenses

	13 Weeks Ended						~~39 Weeks Ended~~
($ in millions)	~~November~~May 23,~~2024~~2025			~~October~~May 284,~~2023~~2024			~~November 2,2024~~			~~October 28,2023~~
Operating expenses	$	1,~~280~~188		$	1,~~306~~192		$	~~3,762~~		$	~~3,757~~
Operating expenses as a percentage of net sales	3334.43		%	3435.72		%	~~34.4~~		%	~~35.5~~		%
Operating margin	97.35		%	6.61		%	~~7.8~~		%	~~3.3~~		%

Operating expenses ~~decreased~~were ~~$26~~relatively ~~million~~flat, orbut 1decreased 0.39 percentage points as a percentage of net sales during the ~~third~~first quarter of fiscal ~~2024~~2025 compared with the ~~third~~first quarter of fiscal ~~2023~~2024, primarily due to aan ~~decrease~~increase in ~~advertising~~net ~~expenses~~sales while maintaining operating discipline.

Operating expenses increased $5 million, but decreased 1.1 percentage points as a percentage of net sales during the first three quarters of fiscal 2024 compared with the first three quarters of fiscal 2023, due to an increase in net sales as well as the following:

•an increase in performance-based compensation; and

•a gain on sale of building of $47 million that occurred during the first quarter of fiscal 2023; partially offset by

•restructuring expenses of $89 million incurred during the first three quarters of fiscal 2023 as a result of actions taken to simplify and optimize our operating model and structure; and

•a decrease in advertising expenses.

Interest Expense

	13 Weeks Ended				~~39 Weeks Ended~~
($ in millions)	~~November~~May 23,~~2024~~2025		~~October~~May 284,~~2023~~2024		~~November 2,2024~~		~~October 28,2023~~
Interest expense	$	23	$	2821	$	68	$	66

Interest expense primarily includes interest on outstanding borrowings and obligations mainly related to our Senior Notes and tax-related interest expense.

Interest Income

13 Weeks Ended

~~39 Weeks Ended~~

($ in millions)

~~November~~May 23,~~2024~~2025

~~October~~May 284,~~2023~~2024

~~November 2,2024~~

~~October 28,2023~~

Interest income

(2926)

(2824)

~~(80)~~

~~(58)~~

Interest income increased slightly during the ~~third~~first quarter of fiscal ~~2024~~2025 compared with the ~~third~~first quarter of fiscal ~~2023, primarily due to higher cash balances, partially offset by a decrease in tax-related interest income. Interest income increased $22 million during the first three quarters of fiscal~~ 2024 ~~compared with the first three quarters of fiscal 2023~~, primarily due to higher cash balances ~~and higher interest rates during the first half of fiscal 2024~~, partially offset by alower ~~decrease in tax-related~~ interest ~~income~~rates.

Income Taxes

	13 Weeks Ended						~~39 Weeks Ended~~
($ in millions)	~~November~~May 23,~~2024~~2025			~~October~~May 284,~~2023~~2024			~~November 2,2024~~			~~October 28,2023~~
Income tax expense	$	8770		$	3250		$	~~227~~		$	21
Effective tax rate	2426.16		%	1224.80		%	~~26.2~~		%	~~6.2~~		%

The increase in the effective tax rate for the ~~third~~first quarter of fiscal ~~2024~~2025 compared with the ~~third~~first quarter of fiscal ~~2023~~2024 is primarily due to ~~changes~~less infavorable ~~valuation~~impacts ~~allowances~~of stock-based compensation, as well as changes in the ~~prior~~amount ~~year~~and mix of jurisdictional earnings.

The increase in the effective tax rate for the first three quarters of fiscal 2024 compared with the first three quarters of fiscal 2023 is primarily due to tax benefits recognized in the prior year from a U.S. transfer pricing settlement related to our sourcing activities, changes in valuation allowances in the prior year, current year increases to certain income tax reserves, and changes in the amount and mix of jurisdictional earnings, partially offset by a favorable impact from stock-based compensation.

The Organization for Economic Co-operation and Development ("OECD") has introduced a new global minimum corporate tax of 15%, commonly referred to as Pillar Two. The rules, as they currently stand, did not have a material impact on the effective tax rate for the third quarter of fiscal 2024 or for the first three quarters of fiscal 2024 and are not expected to have a material impact on our fiscal 2024 effective tax rate. We will continue to monitor U.S. and global legislative action related to Pillar Two for potential impacts.

LIQUIDITY AND CAPITAL RESOURCES

In addition to our cash flows from operating activities, our primary sources of liquidity include cash and cash equivalents, short-term investments, ~~our Senior Notes,~~ and our ABL Facility. As of ~~November~~May 23, ~~2024~~2025, we had cash and cash equivalents of $1.9798 billion and short-term investments of $~~250~~244 million. We hold our cash, cash equivalents, and short-term investments across a diversified set of reputable financial institutions and monitor the credit standing of those financial institutions. In addition, we ~~have issued $1.5 billion aggregate principal amount of our Senior Notes, and~~ are also able to supplement near-term liquidity, if necessary, with our ABL Facility or other available market instruments. There were no borrowings under the ABL Facility as of ~~November~~May 23, ~~2024~~2025. See Note 4 of Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q, for disclosures on ~~the~~our ~~Senior~~debt ~~Notes~~ and ~~ABL~~credit ~~Facility~~facilities.

Our largest source of operating cash flows is cash collections from the sale of our merchandise. Our primary uses of cash include merchandise inventory purchases, lease and occupancy costs, personnel-related expenses, purchases of property and equipment, shipping costs, and payment of taxes. In addition, we may have dividend payments and share repurchases. The seasonality of our operations, in addition to the impact of ~~global~~macroeconomic ~~economic~~factors, ~~conditions~~may ~~such~~lead asto ~~the~~significant ~~uncertainty~~fluctuations ~~surrounding~~in ~~global~~certain ~~inflationary~~asset ~~pressures,~~and ~~acts~~liability ofaccounts ~~terrorism~~as orwell ~~war,~~as ~~global~~cash ~~credit~~inflows and ~~banking~~outflows ~~markets,~~between ~~and~~fiscal ~~the~~year-end ~~geopolitical~~and ~~landscape~~subsequent ~~including~~interim ~~new~~periods. ~~legislation~~These ~~and~~macroeconomic ~~the~~factors ~~potential~~include ~~impacts~~uncertainty ofsurrounding ~~recent~~global ~~elections~~geopolitical instability, ~~may~~inflationary ~~lead~~pressures, toforeign ~~significant~~currency fluctuations, and changes in ~~certain~~interest ~~asset~~rates, ~~and~~duties, ~~liability~~tariffs, ~~accounts~~tax aslaws, ~~well~~and asother ~~cash~~restrictions ~~inflows~~as ~~and~~a ~~outflows~~result ~~between~~of government fiscal, ~~year-end~~monetary, trade, and ~~subsequent~~tax ~~interim periods~~policies.

~~Our~~We ~~voluntary~~believe ~~SCF~~our ~~program~~existing ~~provides~~balances ~~certain~~of ~~suppliers~~cash, ~~with~~cash ~~the~~equivalents, ~~opportunity~~and toshort-term ~~sell~~investments, ~~their~~along ~~receivables~~with ~~due~~our ~~from~~cash usflows tofrom ~~participating~~operations, ~~financial institutions at the sole discretion of both the suppliers~~ and ~~the~~instruments ~~financial~~mentioned ~~institutions.~~above, Weprovide ~~are~~sufficient ~~not~~funds afor ~~party~~our tobusiness ~~the~~operations ~~agreements~~as ~~between~~well ~~our~~as ~~suppliers~~capital ~~and~~expenditures, ~~the~~dividends, ~~financial~~share ~~institutions~~repurchases, and ~~our~~other ~~payment~~liquidity ~~terms~~requirements ~~are~~associated ~~not~~with ~~impacted~~our bybusiness ~~whether~~operations aover ~~supplier participates in~~ the ~~SCF~~next ~~program. See Note~~ 12 ofmonths ~~Notes~~and ~~to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q, for disclosures on the Company's SCF program~~beyond.

We believe our existing balances of cash, cash equivalents, and short-term investments, along with our cash flows from operations, and instruments mentioned above, provide sufficient funds for our business operations as well as capital expenditures, dividends, and other liquidity requirements associated with our business operations over the next 12 months and beyond.

Cash Flows from Operating Activities

Net cash ~~provided~~used byfor operating activities ~~increased~~was $38140 million during the first ~~three~~quarter ~~quarters~~ of fiscal ~~2024~~2025 compared with $30 million of net cash provided by operating activities during the first ~~three~~quarter ~~quarters~~ of fiscal ~~2023~~2024, primarily due to the following:

~~Net~~•a ~~Income~~decrease of $113 million related to accrued expenses and other current liabilities primarily due to higher payments for performance-based compensation during the first quarter of fiscal 2025 compared with the first quarter of fiscal 2024; and

•ana ~~increase~~decrease of $56 million related to merchandise inventory in ~~net~~part ~~income;~~due to timing of receipts during the first quarter of fiscal 2025.

Non-cash item

•an increase of $47 million due to a gain that occurred during the first three quarters of fiscal 2023 resulting from the sale of a building;

Change in operating assets and liabilities

•a decrease of $339 million related to merchandise inventory due to the seasonal increase in inventory during the first three quarters of fiscal 2024 compared with no increase in the first three quarters of fiscal 2023 due to an elevated opening balance of inventory.

Cash Flows from Investing Activities

Net cash used for investing activities ~~increased~~decreased $~~373~~218 million during the first ~~three~~quarter ~~quarters~~ of fiscal ~~2024~~2025 compared with the first ~~three~~quarter ~~quarters~~ of fiscal ~~2023~~2024, primarily due to $198 million of net purchases of short-term investments during the ~~following:~~first quarter of fiscal 2024.

•$246 million of net purchases of short-term investments during the first three quarters of fiscal 2024; and

•$76 million in net proceeds from the sale of a building during the first three quarters of fiscal 2023.

Cash Flows from Financing Activities

Net cash used for financing activities ~~decreased~~increased $~~323~~76 million during the first ~~three~~quarter ~~quarters~~ of fiscal ~~2024~~2025 compared with the first ~~three~~quarter ~~quarters~~ of fiscal ~~2023~~2024, primarily due to $~~350~~70 million ~~for~~in ~~repayments~~repurchases of ~~revolving~~common ~~credit~~stock ~~facility~~during ~~borrowings~~the first quarter of fiscal 2025 compared with no repurchases during the first ~~three~~quarter ~~quarters~~ of fiscal ~~2023~~2024.

2018

Free Cash Flow

Free cash flow is a non-GAAP financial measure. We believe free cash flow is an important metric because it represents a measure of how much cash a company has available for discretionary and non-discretionary items after the deduction of capital expenditures. We require regular capital expenditures including technology improvements as well as building and maintaining our stores and distribution centers. We use this metric internally, as we believe our sustained ability to generate free cash flow is an important driver of value creation. However, this non-GAAP financial measure is not intended to supersede or replace our GAAP results.

The following table reconciles free cash flow, a non-GAAP financial measure, from a GAAP financial measure.

	39 Weeks Ended
	13 Weeks Ended
($ in millions)	~~November~~May 23,~~2024~~2025		~~October~~May 284,~~2023~~2024
Net cash provided by operating activities	$	870	$	832
Net cash provided by (used for) operating activities	$	(140)	$	30
Less: Purchases of property and equipment	(~~330~~83)		(~~288~~93)
Free cash flow	$	~~540~~(223)	$	~~544~~(63)

Dividend Policy

In determining whether and at what level to declare a dividend, weour ~~consider~~Board considers a number of factors including sustainability, operating performance, liquidity, and market conditions.

We paid a dividend of $0.15165 per share during the ~~third~~first quarter of fiscal ~~2024~~2025. In ~~November~~May ~~2024~~2025, the Board authorized a dividend of $0.15165 per share for the ~~fourth~~second quarter of fiscal ~~2024~~2025.

Share Repurchases

Certain information about the Company’s share repurchases is set forth in Note 7 of Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Summary Disclosures about Contractual Cash Obligations and Commercial Commitments

There have been no material changes to our contractual obligations and commercial commitments as disclosed in our Annual Report on Form 10-K as of February 31, ~~2024~~2025, other than those which occur in the normal course of business. See Note 9 of Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q, for disclosures on commitments and contingencies.

Critical Accounting Policies and Estimates

There have been no significant changes to our critical accounting policies and estimates as discussed in our Annual Report on Form 10-K for the fiscal year ended February 31, ~~2024~~2025. See Note 1 of Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q, for disclosures on accounting policies.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Our market risk profile as of February 31, ~~2024~~2025 is disclosed in our Annual Report on Form 10-K and has not significantly changed. ~~other~~See ~~than~~Notes as4, ~~noted~~5, ~~below.~~and 6 of Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q, for disclosures on our debt and credit facilities, investments, and derivative financial instruments.

As of November 2, 2024, we had $250 million in short-term investments and $8 million in cash equivalents which were recorded on the Condensed Consolidated Balance Sheet. Changes in interest rates impact the fair value of our investments and the interest income derived from our investments.

See Notes 4, 5, and 6 of Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q, for disclosures on our debt and credit facilities, investments, and derivative financial instruments.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

There was no change in the Company’s internal control over financial reporting that occurred during the Company’s ~~third~~first quarter of fiscal ~~2024~~2025 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

2219

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

We cannot predict with assurance the outcome of Actions brought against us. Accordingly, developments, settlements, or resolutions may occur and impact operations in the quarter of such development, settlement, or resolution. However, we do not believe that the outcome of any current Action would have a material effect on our financial results.

Item 1A. Risk Factors.

~~There~~The ~~have~~following ~~been no material changes in our~~ risk factors ~~from~~appearing ~~those disclosed~~ in Part I1, Item 1A of our Annual Report on Form 10-K for the fiscal year ended February 31, ~~2024~~2025 have been updated.

Risks Related to Macroeconomic Conditions

Global economic conditions have and could continue to adversely affect our business, financial condition, and results of operations.

Our business is affected by global economic conditions and the related impact on consumer spending worldwide. Global economic conditions have impacted and could continue to impact our business. Some of the factors that may influence consumer spending patterns include higher unemployment levels; pandemics and other health crises; extreme weather conditions and natural disasters; higher consumer debt levels; inflationary pressures; recession or fear of recession; global geopolitical instability (including in Europe and the Middle East); reductions in net worth based on market declines and uncertainty; home foreclosures and reductions in home values; fluctuating interest and foreign currency exchange rates and credit availability; government austerity measures; changes and uncertainties related to government fiscal, monetary, trade, and tax policies including changes in interest rates, duties, tariffs, tax laws, and other restrictions; fluctuating fuel and other energy costs; fluctuating commodity prices; and reduced consumer confidence and general uncertainty regarding the overall future economic environment. Historically, consumer purchases of discretionary items, including our merchandise, generally decline during recessionary periods when disposable income is lower or during other periods of economic instability or uncertainty.

The United States has recently enacted significant changes to its trade policy and imposed or proposed imposing substantial tariffs on imported goods from a number of countries. The imposition of tariffs has resulted in increased market volatility and exacerbated inflationary pressures and recessionary fears, and may negatively impact gross domestic product growth in the United States and other countries, all of which could result in reduced discretionary spending by our customers. The situation regarding U.S. tariffs and trade policies has been fluid and may continue to change. As a result of these dynamics, any future changes to U.S. tariffs or worsening trade tensions between the United States and other countries could adversely affect our sales and results of operations.

Deteriorating economic conditions or geopolitical instability in any of the regions in which we and our franchisees sell our products could reduce consumer confidence and negatively impact consumer spending, and thereby could adversely affect our sales and results of operations. In challenging and uncertain economic environments, we cannot predict whether or when such circumstances may improve or worsen, or what impact, if any, such circumstances could have on our business, financial condition, and results of operations, or on the price of our common stock.

Risks Related to Our Business Operations

Trade matters may disrupt our supply chain.

Our operations are subject to complex trade and customs laws, regulations, and tax requirements. The countries in which our products are manufactured or imported, or may be manufactured or imported in the future, may from time to time impose duties, tariffs, or other restrictions on our imports or adversely change existing restrictions.

The United States has recently enacted significant changes to its trade policy and imposed or proposed imposing substantial tariffs on imported goods from a number of countries. Unless otherwise exempted or subject to a different rate, all imports into the United States are currently subject to a baseline 10 percent reciprocal tariff rate. The United States has also imposed significantly higher individualized reciprocal tariff rates on certain countries with which the United States has the largest trade deficits, including Vietnam (46 percent), Indonesia (32 percent), and many of our other sourcing countries. The higher individualized reciprocal tariff rates are currently paused until July 9, 2025 (or in the case of China, until August 12, 2025), while the United States negotiates with these countries. Imports to the United States from China are also currently subject to an additional 20 percent tariff rate.

In fiscal 2024, approximately 27 percent and approximately 19 percent of our merchandise, by dollar value, was purchased from factories in Vietnam and Indonesia, respectively. In fiscal 2024, less than 10 percent of our merchandise, by dollar value, was purchased from factories in China.

There is currently significant uncertainty about the future relationship between the United States and many other countries with respect to tariffs and trade policies. The situation regarding U.S. tariffs and trade policies has been fluid and may continue to change. This risk may be particularly acute should trade tensions between the United States and other countries continue to worsen, which could result in, among other things, increased tariff rates and other trade restrictions, increased product costs, disruptions in the availability of goods, or a breakdown of international supply chains.

Through enterprise risk management, we continue to evaluate the impact of current and potential tariffs on our supply chain, costs, sales, and profitability, as well as our strategies to mitigate negative impacts. Given the current uncertainty regarding the scope and duration of these tariffs, as well as the potential for additional trade actions by the United States and reciprocal trade actions by other countries, the impact on our business, financial condition and results of operations is unknown but could be material, especially if the higher individualized reciprocal tariff rates on our sourcing countries are maintained or if there is an escalation of tariffs or other trade restrictions. We can provide no assurance that any strategies we implement to mitigate the impact of such tariffs or other trade actions will be successful in whole or in part. To the extent that our supply chain, costs, sales, or profitability are negatively impacted by these tariffs or other trade actions, our business, financial condition and results of operations may be adversely affected.

Our sourcing operations could also be adversely affected by geopolitical and financial instability in our sourcing countries, as well as U.S. or foreign labor strikes, work stoppages, boycotts, or port congestion, resulting in the disruption of trade from our sourcing countries, significant fluctuations in the value of the U.S. dollar against foreign currencies, restrictions on the transfer of funds, or other trade disruptions. Disruptions to our sourcing operations in our sourcing countries could increase the cost or reduce the supply of apparel available to us and adversely affect our business, financial condition and results of operations.

There have been no other material changes in our risk factors from those disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended February 1, 2025.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

InThe ~~February~~following ~~2019,~~table ~~the~~presents ~~Board~~information ~~approved~~with arespect ~~$1.0~~to ~~billion~~purchases ~~share~~of ~~repurchase~~common ~~authorization,~~stock ~~which~~of ~~has~~the noCompany ~~expiration~~made ~~date.~~for ~~There~~the ~~were~~13 noweeks ~~shares~~ended ~~repurchased~~May 3, ~~excluding~~2025 ~~shares~~by ~~withheld to settle employee tax withholding payments related to~~ the ~~vesting~~Company ofor ~~stock~~any ~~units,~~affiliated ~~during the 13 weeks ended November 2~~purchaser, ~~2024.~~as ~~The~~defined ~~February~~by ~~2019~~Rule ~~repurchase~~10b-18(a)(3) ~~program~~under ~~had~~the ~~$476~~Securities ~~million~~Exchange ~~remaining~~Act as of ~~November 2~~1934, ~~2024.~~as amended:


	Total Number of Shares Purchased (1)	Average Price Paid Per Share Including Commissions		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or approximate dollar amount) of Shares that May Yet be Purchased Under the Plans or Programs (2)
Month #1 (February 2 - March 1)	—	$	—	—	$	401	million
Month #2 (March 2 - April 5)	2,421,057	$	19.66	2,421,057	$	353	million
Month #3 (April 6 - May 3)	1,188,000	$	18.45	1,188,000	$	331	million
Total	3,609,057	$	19.26	3,609,057

__________

(1)Excludes shares withheld to settle employee tax withholding payments related to the vesting of stock units.

(2)In February 2019, the Board approved a $1 billion share repurchase authorization, which has no expiration date.

Item 5. Other Information.

During the 13 weeks ended ~~November~~May 23, ~~2024~~2025, none of our directors or Section 16 officers adopted, modified, or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as those terms are defined in Item 408(a) of Regulation S-K, except as follows:

On ~~September~~March 1918, ~~2024~~2025, ~~Mark~~Robert ~~Breitbard~~Fisher, ~~President~~a ~~and CEO of Gap brand~~director, adopted a trading plan intended to satisfy the affirmative defense of Rule 10b5-1(c) to ~~sell~~gift up to ~~964~~25,~~990~~500 shares of Gap Inc. common stock ~~(all pursuant to unexercised stock options granted from 2017 to 2022)~~. Unless otherwise terminated pursuant to its terms, the plan will terminate on ~~December~~March 3118, ~~2025~~2026, or when all shares under the plan are ~~sold~~gifted.

On ~~September~~March 1118, ~~2024~~2025, ~~Julie~~William ~~Gruber~~Fisher, ~~Chief~~a ~~Legal and Compliance Officer and Corporate Secretary~~director, ~~modified~~adopted a trading plan ~~previously adopted on August 29, 2023,~~ intended to satisfy the affirmative defense of Rule 10b5-1(c). ~~Previously, the plan provided for the sale of up~~ to ~~417,892~~gift shares of Gap Inc. common stock (including 161,804 shares pursuant to unexercised stock options granted from 2014 to 2022). 196,565 shares were sold under the plan before the modification date. As modified, up to ~~492~~25,~~578~~500 shares of Gap Inc. common stock ~~may be sold under the plan (including 326,368 shares pursuant to unexercised stock options granted from 2015 to 2020)~~. ~~This figure does not include shares already sold under the plan.~~ Unless otherwise terminated pursuant to its terms, the ~~modified~~ plan will ~~still~~ terminate on ~~September~~March 218, ~~2025~~2026, or when all shares under the plan are ~~sold~~gifted.

On September 4, 2024, Chris Blakeslee, President and CEO of Athleta, adopted a trading plan intended to satisfy the affirmative defense of Rule 10b5-1(c) to sell up to 103,246 shares of Gap Inc. common stock. Unless otherwise terminated pursuant to its terms, the plan will terminate on August 29, 2025, or when all shares under the plan are sold.21

On September 3, 2024, Katrina O'Connell, Chief Financial Officer, adopted a trading plan intended to satisfy the affirmative defense of Rule 10b5-1(c) to sell up to 550,543 shares of Gap Inc. common stock (including 221,216 shares pursuant to unexercised stock options granted from 2015 to 2022). Unless otherwise terminated pursuant to its terms, the plan will terminate on September 3, 2025, or when all shares under the plan are sold.

Item 6. Exhibits.

Incorporated by Reference

Exhibit No.

Exhibit Description

Form

File No.

Exhibit

Filing Date

Filed/FurnishedHerewith

3.1

Restated Certificate of Incorporation

10-Q

1-7562

3.1

August 30, 2024

3.2

Amended and Restated Bylaws (effective August 15, 2022)

10-Q

1-7562

3.3

August 26, 2022

10.1†

2025 Form of ~~Amendment~~Restricted ~~No.~~Stock 1Unit toAward ~~2024 Performance Share~~ Agreement under the 2016 Long-Term Incentive Plan

8-K

1-7562

10.1

~~October~~March 11, ~~2024~~2025

10.2†

2025 Form of Performance Share Agreement under the 2016 Long-Term Incentive Plan

8-K

1-7562

10.2

March 11, 2025

10.3†

2025 Form of Director Stock Unit Agreement under the 2016 Long-Term Incentive Plan

8-K

1-7562

10.3

March 11, 2025

31.1

Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer of The Gap, Inc. (Section 302 of the Sarbanes-Oxley Act of 2002)

31.2

Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer of The Gap, Inc. (Section 302 of the Sarbanes-Oxley Act of 2002)

32.1

Certification of the Chief Executive Officer of The Gap, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2

Certification of the Chief Financial Officer of The Gap, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101

The following materials from The Gap, Inc.’s Quarterly Report on Form 10-Q for the quarter ended ~~November~~May 23, ~~2024~~2025, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Stockholders' Equity; (v) the Condensed Consolidated Statements of Cash Flows; and (vi) Notes to Condensed Consolidated Financial Statements

104

Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

_____________________________

† Indicates management contract or compensatory plan or arrangement.

2422

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		THE GAP, INC.
Date:	~~November~~May 2630, ~~2024~~2025	By	/s/ Richard Dickson
			Richard Dickson
			President and Chief Executive Officer
			(Principal Executive Officer)
Date:	~~November~~May 2630, ~~2024~~2025	By	/s/ Katrina O'Connell
			Katrina O'Connell
			Executive Vice President and Chief Financial Officer
			(Principal Financial and Accounting Officer)

2523

Filing Compare · GAP INC