Gap CEO Wants to Control the Controllable

First of all, thank you, Lisa. But look, I would first off say from a revenue and sourcing standpoint, the Middle East region is an immaterial portion of our business. We're, of course, monitoring the situation very closely and evaluating impacts, but we don't see any near-term impacts at this time. What I would say at current oil prices, there's not a meaningful impact to gross margin in the first quarter. So we're not making any sourcing changes at this time. We have identified alternative sourcing options to maximize flexibility and we'll monitor the situation as it evolves. But the vast majority of our freight is managed through contractual arrangements that are already embedded in our outlook.

Look, our playbook is about driving relevance and revenue and operating with the discipline that we have to run a scaled business. We also pride ourselves on being able to control the controllables in any business. There's lots of outside influences that happen on a daily basis, and no matter how impactful those are, it's up to the management team, the leadership team and the people of the company to persevere, be agile, resilient and drive and execute against the playbook. And ours at Gap is working incredibly well. I mean, obviously, we had another successful fourth quarter. It's also marking another year of meaningful progress for the company, achieving our second consecutive year of top line growth. It's the eighth consecutive quarter of comp sales. And as you know, this has been a fantastic transformation story where two really pivotal point of continued progress and we're excited about the future. No matter what the outside influences are, we're just staying disciplined in executing our strategic plan.

Look, first off, I would reiterate on balance, it was a successful quarter up 3%, and that was executed against our expectations. The comparable sales on Old Navy up three, that's up against another three that we had last year, Gap up seven and last year up seven as well. Banana up for the third consecutive comp that we've had so far. And as you mentioned, we've been rebuilding Athleta. We're also winning against all income cohorts. That has been a really important part of our strategy in the context of the broad based appeal that we have and we're winning market share. Last but not least, I would also mention that we drove one of the highest gross margins that we've had in the last 25 years, improved our balance sheet and we're ending with $3 billion in cash. So it's a very stable and if not poised for continued progress as we move into the future and our next phase of our transformation, which will be about continuous improvement, continuing to grow our core apparel business as we move into the next phase, which will be an accelerated growth phase. So on balance, three out of four brands continued and now reinvigorated and as you mentioned, reinvigorating Athleta.