The Gap Q1 2026 Earnings Call | Old Navy Brand Recovery Stabilizes Margins To Support FY Outlook

Good afternoon ladies and gentlemen. I would like to welcome everyone to the GAP Inc. First quarter 2026 earnings conference call. At this time all participants are in a listen-only mode. For those analysts who wish to participate in the question and answer session after the presentation, you may now press star one to enter the Q&A queue. As a reminder, please limit your questions to one per participant. If anyone should require assistance during the call, please press the star key followed by the zero key on your touchtone phone. I would now like to introduce your host, Shirley Martin, senior director of investor relations.

Good afternoon everyone. Welcome to GAP Inc.'s first quarter fiscal 2026 earnings conference call. Before we begin, I'd like to remind you that the information made available on this conference call contains forward-looking statements that are subject to risks that could cause our actual results to be materially different. For information on factors that could cause our actual results to differ materially from any forward-looking statements, please refer to the cautionary statements contained in our latest earnings release, the risk factors described in the company's annual report on form 10K filed with the Securities and Exchange Commission on March 17th, 2026 and other filings with the Securities and Exchange Commission, all of which are available on gapinc.com. These forward-looking statements are based on information as of today, May 28th, 2026, and we assume no obligation to publicly update or revise our forward-looking statements. Our latest earnings release and the accompanying materials available on gapinc.com also include descriptions and where available reconciliations of financial measures not consistent with generally accepted accounting principles. All market share data referenced today will be from Circon's US Apparel Consumer Service for the 12 months ending April 2026 unless otherwise stated. Joining me on the call today are our chief executive officer Richard Dixon and chief financial officer Katrina O'connell. With that, I'll turn the call over to Richard.

Thanks Shirley and good afternoon everyone. Before we discuss our results for the first quarter, let me begin with a moment of remembrance for our co-founder Doris Fischer. Doris was a visionary and an extraordinary human being whose brilliance, quiet determination, and heart shaped everything from Gap Inc.'s indelible influence on fashion and retail to philanthropy to the San Francisco art scene. In GAP speak, she was a true original and she worked tirelessly to ensure that GAP Inc. always did more than sell clothes, which inspires our purpose today. We bridge gaps to create a better world. On behalf of everyone at GAP, Inc., I would like to extend our deepest condolences to the Fischer family and ensure them that the legacy Doris and Don Fischer created in GAP, Inc. will endure. Now, transitioning to our results. In the first quarter, we continued to execute on our strategic priorities, delivering progress across several key metrics. Comparable sales increased 2%, marking our ninth consecutive quarter of positive comps. As we once again grew sales across all income cohorts, as the value proposition of our brands continued to resonate, we gained market share, reflecting better product, better storytelling, and building brand relevance. And we outperformed our gross margin outlook, reflecting continued rigor in execution. Overall at the company level, the quarter was in line with our expectations. However, results at the brand level were more varied, reflecting both the different stages of their transformation and some brand specific dynamics. As I reflect on the quarter, with three of our four brands once again delivering positive comps with standout growth at the GAP brand, we continue to demonstrate progress. Yet we know some of our brands have greater potential and we are taking action to unlock stronger performance which I will discuss in more detail. In parallel, we are also investing more intentionally in our future as we build category adjacencies like beauty and accessories where we see a meaningful long-term growth opportunity and capabilities such as our fashion talent platform and technology to amplify how we connect with customers and increase productivity. Lastly, we remain committed to being strong stewards of capital as we balance long-term investments with increased capital returns to our shareholders this year. This reflects the growing strength of our balance sheet and strong conviction in our long-term potential. Katrina will share our updated guidance later during the call. Given the varied performance at the brand level, we are taking a moderated view of full-year revenue growth. At the same time, we are raising our outlook for earnings per share, reflecting continued financial and operational rigor. While we are not starting out as strongly as we anticipated, we are still early in the year. The teams are motivated to drive better results and our goal will be to outperform. Turning now to our detailed first quarter results by brand. Let's start with Old Navy, our largest brand and the number one specialty apparel retailer in the country. In the first quarter, Old Navy once again grew with comp sales increasing 1% on top of last year's 3% comp growth. As noted earlier, our strategic pursuit of key categories continued to deliver results, particularly across active, denim, and kids and baby, all of which posted growth versus last year. Old Navy maintained a top three rank in denim and kids and baby and gained share in denim specifically, reinforcing our leadership in these categories. We were also the only brand in the active category to maintain share within the top five, reflecting the attractive value proposition we continue to deliver. We also had a number of compelling product announcements that tied into pop culture with the launch of Old Navy's second designer collaboration featuring award-winning Christopher John Rogers and a special Devil Wears product collection capitalizing on growing buzz around the sequel. Overall results for Old Navy were primarily impacted by the women's dress business where in reviewing the season, we did not execute as effectively and as a result, customers did not respond to our assortment the way that we had intended. Entering Q2, the seasonal women's dress business continues to underperform our expectations with weakness visible across the broader seasonal product assortment as well. The team has worked swiftly to address these factors, refocusing our efforts on sharper price points and stronger customer messaging to drive conversion for the seasonal categories. Once these changes began to take hold in mid-May, we saw some improvement, but we are carefully monitoring this and making continued adjustments. While we are encouraged by the recent improvement, we also recognize that this level of performance does not reflect our full potential. There is a clear opportunity to do better and we are working closely with the team to sharpen our focus and strengthen execution. As we look ahead into the second half of the year, we have several building blocks in place that give me confidence in our ability to deliver continued improvement. We are seeing strength in denim and active and we expect these key strategic categories to build in prominence in the second half of the year. We are also rolling beauty out to the full store fleet by year end. And following a successful winter pilot, we are launching a first-of-its-kind partnership with Fanatics, the global leader in sports licensing. Separately, as we continue to focus on elevating how the brand shows up to our customers, we are excited to announce the appointment of Michael Francis to the newly created role of chief customer officer for Old Navy. Michael is a highly respected brand builder in retail, best known for reshaping the brand experience and building culture-shaping moments at Target and Walmart, two of the largest retailers in the country. Throughout his career, he has consistently infused value apparel concepts with lifestyle, aspiration, and emotional resonance, redefining how customers engage with accessible fashion. Michael's appointment marks an important step forward as we position Old Navy for its next chapter of building stronger, more meaningful relationships with our customers. In this role, Michael will help sharpen our customer strategy, deepen emotional connection with our audiences, and bring even greater cohesion and consistency to how we show up across every touch point and every season. Now, moving on to Gap. GAP delivered an exceptional quarter. Comp sales increased 10% on top of a 5% comp last year. This marks the brand's 10th consecutive quarter of positive comps as we continue to lean into our heritage of big ideas and culturally relevant narratives to drive growth. As product storytelling and brand relevance continued to strengthen, we expanded our customer file, reflecting growing engagement across generations and achieved our third consecutive quarter of reduced discounting. As we continue to execute our reinvigoration playbook, it's incredibly encouraging to see its impact broadening across additional divisions and categories. At the division level, strength in women's and consistency in men's drove the brand's performance in the first quarter, complemented by a notable return to growth in kids and baby, marking a meaningful milestone for the GAP brand. We're encouraged to see our focused turnaround efforts in kids and baby take hold as our amplification of destination categories through collections like my first denim and baby and trend-right fleece and denim offerings for kids builds resonance. By category, denim remained a key driver of growth in the first quarter as our focus on delivering trend-right product drove another quarter of market share gains. In addition, we also saw strength in fleece amplified by our Sweats Like This music video featuring Grammy nominated singer Young Nico. The campaign significantly outperformed benchmark goals, generating nearly 1.5 billion press and social media impressions and strongly resonated with Gen Z audiences with Gap trending on TikTok within 24 hours of launch. Founded in 1969 as a brand selling denim and records, Gap has always lived at the intersection of fashion, music, and culture. That heritage came to life in a major way this quarter at Coachella, one of the world's largest and most influential music and cultural festivals through our iconic hoodie house activation. The experience drove strong engagement, selling roughly 10,000 custom hoodies and generating over 300 million social media and press impressions. More importantly, it served as another powerful demonstration of GAP's cultural influence, authenticity, and growing relevance with a new generation of consumers. In the first quarter, we continued to reimagine Gap Classics with product collaborations shaped by the distinctive creative lens of Harlem's Fashion Row, Awake New York, and Victoria Beckham. With strong consumer response and engagement around the Victoria Beckham collection, we are excited about the momentum this multi-season collaboration can build in the seasons ahead. Entering the second quarter, we are continuing the drum beat of cultural relevance. Earlier this month, we were thrilled to dress Kendall Jenner in a custom Gap Studio creation designed by Zach Posen at the Met Gala, showcasing the brand's highest expression of style and craftsmanship on one of the world's most iconic cultural stages. As we continue to deliver strong product and storytelling, elevating our customer experience remains paramount. With strong results from the 2025 remodel program, we plan to remodel about 30 stores this year, bringing approximately 25% of the North America specialty fleet into the new concept by year end. I'm proud of the GAP team for the consistency, creativity, and clarity with which they are executing the playbook with strength broadening across divisions and categories, continued expansion of our customer file, and a growing presence in key cultural moments. GAP is truly building momentum and we look forward to continuing that in the quarters ahead. Moving on to Banana Republic. Banana Republic continued to make solid progress in the quarter. Comparable sales increased 2%, reflecting the brand's fourth consecutive quarter of positive comps. Men's and women's performed well, reflecting more balanced growth across the business with strength in key categories including pants and sweaters. We continued to lean into Banana Republic's heritage as a storytelling brand through the lens of the modern explorer. This came to life through a collaboration with the Explorers Club, featuring an archive reissue capsule reimagining some of our most iconic styles from the early decades through a contemporary lens. The collection has generated strong engagement and accolades across social conversations, reinforcing Banana Republic's distinct brand positioning. As you know, I have been leading Banana Republic through its fix the fundamentals stage as we conducted a search for the right leader. With the brand now delivering greater consistency, last week we announced the appointment of Donald Kohler as the new president and CEO of Banana Republic. Donald has an exceptional career journey spanning more than three decades with transformative leadership roles across iconic brands such as Calvin Klein, Tommy Hilfiger, Burberry, Ferrari, and Diesel, including more than a decade at our very own GAP brand. Now, we are excited to welcome him back to our family. Donald's operational excellence combined with his natural instincts for great design, impactful merchandising, and powerful storytelling positions him strongly to lead Banana Republic's next chapter. As I turn over the reins, I want to extend my personal thanks and gratitude to the team. They have done an outstanding job strengthening the brand over the past several years, and I am excited for what we can deliver with Donald's leadership. Now turning to Athleta. As we shared last quarter, 2026 is a rebuild year for Athleta. Since Maggie joined as the president in August of last year, the team has been taking steps to strengthen the brand's foundation, restoring clarity to its brand purpose, repositioning talent, and re-architecting product and creative plans to better reflect how customers live, shop, and engage with the active category. Today, as we continue to rebuild Athleta, we have been focused on clearing less productive legacy product. We made progress in the first quarter. However, this process is taking longer than anticipated and put pressure on sales, leading to a disappointing result. For the second quarter, we remain focused on clearing the inventory so that we can begin to transition towards a cleaner assortment that better represents our go-forward aspirations for the brand in the fall. As we have worked to clear, we also have been introducing new product at a smaller scale and have seen encouraging results. In the first quarter, our launch of the journey travel collection in targeted locations saw a positive customer response, driving increased engagement and strong sell-through. We also saw momentum in new leg shapes across key franchises like our heritage elation line. These early reads are helping to inform our product direction and where we are choosing to lean in further in the coming quarters. While we recognize that it will take time for our actions to translate into an improved growth profile, Athleta remains an important brand in our portfolio and we are focused on rebuilding it for long-term growth. Now moving on to our investments for beauty and accessories. We are approaching 2026 as a test and learn year focused on deepening our customer engagement, capturing insights, and leveraging our learnings to inform a confident build over time. In beauty, our efforts this year are centered on our two largest brands, Old Navy and Gap. At Old Navy, as we have shared, we began piloting beauty in the third quarter of last year in 150 select stores, engaging with our customers through various product assortments, pricing strategies, and merchandising models to understand how best to meet them in their shopping journey. The pilot provided important learnings that we are applying as we roll beauty out to the rest of the fleet during the second half of this year with a path to scaling the category in 2027 and beyond. At GAP, we're excited to relaunch fragrance this summer, celebrating heritage scents like heaven and grass with a modern expression through refreshed packaging, updated formulations, and elevated storytelling. This represents a step forward in rekindling Gap's iconic appeal in fragrance through a revitalized brand identity and product lineup. Moving to accessories. This year, our focus is on Gap, where we will be launching a collection in the fall that embodies the brand's spirit of individuality. I'm energized by what I see in product. It's elevated and delivers great quality at a great price, and we are excited to share the collection with our customers. Now, onto our platform capabilities. Starting with our fashion talent platform, we see a broad opportunity across our portfolio to amplify our presence in moments that matter by bringing together fashion with music, sports, and entertainment. Sports in particular is an influential force shaping fashion and trends. Our exciting partnership with Fanatics is a great example of new ways we are tapping into this new arena and we will continue to explore additional opportunities tied to major global sporting moments. In the first quarter, we also relaunched our loyalty program, Encore, transitioning our house file of around 40 million customers from a traditional transaction-based program to a broader customer engagement platform. Technology is another important capability we are investing in. We are a fashion company that is brand-led and intelligence-powered. The brands create the demand by executing on the reinvigoration playbook. Intelligence enabled by data and AI empowers our teams to make decisions that drive greater consistency and efficiency. The most important place this shows up in what we call product intelligence: how we design, how we buy, how we allocate, and how we replenish. We are leveraging technology and AI to help our teams make smarter merchandising decisions, improve inventory productivity, and drive the right value equation for our customers. Another place this shows up is in the customer experience, making it easier to find the right product, feel confident in the fit, and discover what is new and relevant. This includes extending discovery through new AI powered shopping partnerships, including our recently announced partnership with Google's Gemini. We are also deploying AI across our internal operations to drive the productivity that funds our investment agenda without expanding our cost structure. We look forward to sharing more details on our technology investments and platforms in the coming quarters. In closing, first quarter results speak to continued progress in our transformation. Yet, we know we need to deliver at higher levels of growth and the teams are focused on executing to this. At the same time, the fundamentals of our business remain strong and the rigor we've instilled throughout the organization are enabling continued margin expansion, growing cash flow, and increased returns to shareholders this year. I want to thank our teams for their resilience and dedication to achieving the full potential of our portfolio. I will now hand the call over to Katrina to walk you through our financial results and 2026 outlook.

Thank you. As a reminder, to ask a question, please press star, then the number one on your telephone keypad. If you would like to withdraw your question, simply press star one again. Your first question comes from Matthew Boss with JP Morgan. Your line is open.

Great. Thanks. So Richard, to dig maybe a little deeper into the top line improvement embedded in the back half of the year at Old Navy, what is the timeline that you see to fully rightsize the product assortment and value proposition? If we're thinking about back to school, at the Gap, have you seen any sequential softening in the second quarter relative to the 10 comps in the first quarter? And then at Athleta, what's a reasonable timeline for inventory optimization in your view?

Okay, Matthew, there's a lot to unpack there, but I appreciate the breadth of the questions. First, zooming out, we delivered progress across several key metrics in the first quarter. As mentioned, it's our ninth consecutive quarter of positive comparable sales. Three out of the four brands are growing. Our comps up 2%. That's building on 2% comp growth from last year, outperforming our gross margin outlook by 30 basis points and winning across all income cohorts. Last but not least, returning over $450 million in cash to shareholders through dividends and repurchases. When we get into the specifics of each brand, we'll start with the Old Navy question first. Important to recognize we did deliver a 1% comp on top of last year's 3% growth. That also marks the brand's sixth consecutive quarter of positive comps. Now looking at the specifics of the categories, we also continued to deliver results particularly across active, denim, kids and baby. These have been categories that we've strategically pursued winning. All of them posted growth versus last year and we continue to build relevance in those categories with our customers. Important also to mention that we maintained share overall and continue to be a top ranked brand in active, denim, and kids and baby. Now seasonal categories have gotten off to a weaker start, in particular dresses, and bluntly we have not had the right fashion and value equation for that category. The team is moving quickly obviously to drive better conversion, sharper price points, stronger messaging, and as these changes have begun to take hold, we have seen the trends improve. But given the performance that we've had in Q1 and the continued challenge in seasonal products in Q2, we are taking a moderated view on the year. That being said, we are driving for better results. So specifically when I look to the second half, seasonal categories will be behind us and I'm very confident in our ability to drive improvement. We've got some great exciting new strategic category news with back to school programming, our emphasis on active and denim which are winning categories for us. We're investing in categories that we believe our customers will respond to. As you know, we're rolling out our beauty program to the entire fleet. We just talked about our Fanatics sports licensing partnership which is going to have exciting segments including the NFL in the fall. And so as we look at the overall Old Navy business, first half will be challenged with the seasonal weakness and then as we move forward in the second half we expect that to continue to improve. Now Gap, clearly we feel very good about the GAP brand. Importantly, the consistency that this brand is demonstrating is evident as this is now our 10th consecutive quarter of positive comps. And it's not just a positive comp, it's a double-digit standout 10% comp against 5% last year. So this is really consistent growth. We're seeing the consistency across categories. Women's doing incredibly well. We're making great progress in men's and we've been improving trends in kids and baby. Category performance also remains very healthy and consistent, particularly in denim. We've been delivering clear and consistent brand messages which is obviously resonating with our consumers, particularly with Gen Z. The collaborations that we've done continue to drive excitement and cultural relevance. At the same time I will say we're maintaining that broad multigenerational appeal. Now, GAP will continue to power its categories with trend-right assortments. We're going to leverage collaborations as we move forward and you'll see great cultural moments to build upon as we move not only through the second quarter but back in the back half. As mentioned again here, we're also relaunching our fragrance business which is very exciting. We're launching bags to further build on the brand's momentum. And in summary, what I would say is GAP is back on the forefront of the cultural conversation. It is clearly on a roll as an iconic American brand. We see significant runway ahead as we continue to build momentum through great product, great storytelling, and of course great execution. The third part of your question was Athleta. So look, Athleta, let's unpack that for a bit. 2026, as we've called out, is a rebuild year for Athleta. And as we continue to strengthen the brand's foundation under Maggie's leadership since joining in August, Maggie has taken several actions to strengthen the brand. First off, she's streamlined the assortment considerably, which is resulting in better AUR and margins, even with the challenging top line. She's also been repositioning talent and filling in key roles in her organization. And as you can see on our website, if you take a look, we're delivering a much better creative execution for the brand. It's early but we are seeing some good reads of the new fashion that's arriving, albeit small. But as Katrina shared, we expect Q2 to be similar to Q1. But with all the work Maggie is doing, we feel very good about where we are and the work that they're doing to impact the second half. We've embedded a slight improvement relative to the first half trend, but let's see how the consumer responds. I will also sum up by saying Athleta remains an important brand in our portfolio and we remain focused on rebuilding it for long-term growth.

Great color. Best of luck.

Thank you, Matthew.

The next question comes from Dana Telsey with Telsey Group. Your line is open.

Hi, good afternoon everyone. As you think about the Old Navy business, would you say the Old Navy impact was it more macro or more enhancements that you need to adjust particularly on the women's dress business in terms of what happened? So external or internal really. And then also interesting on the channel distribution. Stores picked up up 3% versus prior quarter flat. Online sales slowed a little bit to down 2% from the fourth quarter up five. Anything you would take to note either geographically or demographically about the channel performance? Thank you.

Thank you, Dana. I'll take the first one and maybe Katrina can join in on the second one. Look, on Old Navy we are not seeing this as a consumer issue. We actually see consistency and strength in our customer behavior. We are winning with all income cohorts, growth across low, middle and high income customers. And as we all know, when we have the right product at the right price value equation, customers are there. This is just a seasonal category that has gotten off to a weaker start. And as I said, in particular, dresses where we just did not have the right fashion and value equation. The team, as I mentioned again, is working really hard and quickly with sharper price points and again stronger messaging. And as these things sort of move through the system, the good news is as we look to the second half, the strength of our categories like active, denim, kids and baby, getting ready for back to school and the programs that we have to build upon them give me great confidence in our ability to continue to improve as the year progresses.

Thanks, Dana.

Your next question comes from Brooke Roach with Goldman Sachs. Your line is open.

Good afternoon and thank you for taking our question. Richard and Katrina, can you provide a diagnosis of what went wrong in your consumer insight and design process that led to this dress assortment and value equation challenge at Old Navy? What are you changing to ensure more consistency in the seasons ahead?

First off, Brooke, thank you for the question. I think, you know, in general we know fashion is a dynamic business and ultimately in this particular case in this particular category we just didn't deliver the right fashion value equation. It doesn't necessarily mean that everything was off. It just means it was much weaker than we had anticipated. We also have had similar weak customer response in swim and shorts. So when we look at the total of seasonal category strength, it's just gotten off to a really slow start. That being said, you know, we do see momentum in those other categories as I mentioned and even more so in some of the other categories including knits. We are, you know, diagnosing this very quickly in terms of where we missed. But again, as long as we see the consistency and strength in our consumer and our traffic, we believe that we can convert that into momentum particularly moving forward into the back half. This is a learn business every day. We obviously want to make sure that more things go right and in this particular case we just have gotten off to a weaker start and right now we're driving the changes that we need to. We're seeing them take hold, we've seen trends improve, and as we move through this I am confident that we'll have the ability to drive improvement in the back half.

Great, thanks so much. I'll pass it on.

Your next question comes from Adrienne Yih with Barclays. Your line is open.

Great. Thank you very much for taking my question. Richard, I wanted to kind of focus on two things at Old Navy. I guess the first of them is the categories that are seasonal in nature. Last year you had taken some pricing up in core categories, denim and athleisure, and those are not the callout segments that are kind of causing the slowdown at Old Navy. So wondering if you can talk about the strength in the core, how big, if you can give us any kind of composition of how big those seasonal categories are and how much they weigh into the back half. And then secondarily on the beauty side, what's your go to market strategy and how big do you want that? Beauty can sometimes be a very complex, fee-intensive business. There's a lot of kind of mess, I'll say, sometimes in the store. So how do you approach that kind of with the in-store presentation and then kind of where do you think you want to take that in terms of categories? Thank you.

Sure. Speaking specifically about the seasonal categories, it is not the largest part of our business, although we do have top ranking presence across nine out of the 10 categories across the industry. As you know, our focus has been strategically intended to drive active, denim, and kids and baby and we have seen the growth of those very consistently, particularly the active business which we continue to grow and pursue as strength. So while these seasonal categories in the first half represent a significant opportunity for us, when we get them wrong, if you will, they represent a challenge. That being said, as I mentioned, we get through it by the end of the second quarter and we move into a much more robust play in the categories that we're demonstrating strength in particularly over the last several years. So I do feel confident that we'll be able to pursue those and ultimately continue to improve. Now on the beauty space, we are very excited about the expansion of beauty. When we zoom out, this is one of the fastest growing, most resilient categories in the US. We have studied our consumer base and the relationship that they have with the beauty category and so we know that they're expecting and excited for our brands to carry beauty products. When you look at other fashion and apparel retailers with a beauty offering, we know the category can represent anywhere from 5% at a low to 20% of their sales. So when you look at our total volume business and even just at that low, it does represent significant opportunity, but we are taking a very purposeful approach to this, both our assortment and merchandising strategy. It'll be a combination in Old Navy of third-party brands as well as our own beauty offerings. We do believe that it could be a really meaningful contributor to the company over time. We are of course rolling out the beauty product into our entire fleet. As you'll recall, last year we piloted 150 stores. We learned a lot in that. Now we're taking that and rolling out to the balance of the fleet this year and again as a mix of third party and our own brands. And then at GAP, we're expanding it. We're relaunching our fragrance collection which had once a very highly coveted, strong customer loyalty following. Fragrances like Dream, Grass, Heaven, Om. We're going to reignite these with incredibly exciting marketing, refreshed packaging, updated formulation, elevated merchandising and storytelling. The presentation will be standalone in our stores. We're working with experts and expertise to really execute this with a long-term vision in mind. So stay tuned. I think you'll obviously see the launch of that this fall and Old Navy will have a full beauty assortment as we progress throughout the year.

Fantastic. Thank you. Best of luck.

Thanks, Adrienne.

Your next question comes from Mark Altschwager with Baird. Your line is open.

Thank you. Good afternoon, Katrina. I guess a few questions on the tariffs. Just first on the cushion you've embedded here. You know, 25 basis points for fuel, 25 for competitive flexibility. How should we be thinking about that competitive piece? Does Old Navy need to comp below a certain level? Is it more about just observing what you're seeing in the promotional environment? Second, on the assumed cliff back to the IEPA level rates, how much of a gross margin headwind is embedded in the back half of the year, Q4 specifically? I'm just wondering with timing of inventory, if that were to happen, is that a back half story or is that more of a 2027 story? And then third, on the refunds, understanding that it's not in the guide, you're not contemplating it, but just anything you can share on a realistic range of outcomes there in terms of what you previously paid and how you think about the timing. Thank you.

That's helpful. Thank you.