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All right, joining me now is Gap CEO Richard Dickson. Hot off a very big quarter and, I would say, a big outlook, which is also very important in this crazy environment for all retail companies. Richard, good to see you. I think a lot of folks that I, that I know that cover your company and retail more broadly, they came into this report with like their hands quaking. They were worried, like what's this company going to report in terms of guidance with tariffs? Yeah, you hopped on your earnings call, Richard, and say you only see a small margin impact this year from tariffs. How's that possible?

Well, first again, I think we just got to lather up and and recognize, we did deliver another quarter that exceeded financial expectations. I mean, sales up, uh, comp up 3% for the quarter. This is our fourth consecutive quarter of positive comps. It's uh the eighth consecutive quarter of market share gains. And really, when you back up from that, it's really indicating that our brands are resonating. Um, the product, the programs, the storytelling, the execution is resonating with consumers. I mean, all in all, this was an exceptional year and Brian, you've been there the whole time. All four brands gaining market share. That's demonstrating strength in the industry. Um, look on tariffs. We're all dealing with tariffs. We're monitoring the developments of tariffs on a hourly hourly basis. Um, we source less than 10% of our product from China, uh, and less than 1% of our product comes from Canada and Mexico. By the way, that's combined. So our guidance contemplates what we know today regarding the tariff policy. Uh, when we look at our supply chain, as we all are, you know, we've strengthened it over the last several years. We're going to continue to diversify our product manufacturing footprint, um, and ensure that we're agile and we respond accordingly. But you know, all in all, I would say, you know, we're always dealing with input costs and variables that every year when you plan a business, uh, this year is no different. You know, there's obviously different circumstances, uh, but we're dealing with it and we're focused most importantly on ensuring that we create the most compelling product with the best quality and value that our customers expect. Regardless of inputs and tariffs and everything else, there's always winners and losers. Our market share performance is showing us that we are doing what's right. We're going to continue to execute against that and be the winners in 2025. You know what I what I'm hearing from you, Richard, and I heard it back on the earnings call, too, I'm like, Gap is, their supply chain may be different than some of its competitors. Is that fair? As you look across the retail landscape, are other apparel companies, are they still overexposed to China?

You know, I I I I can't speak for other companies, uh, quality of supply chain or nimbleness or agility. Uh, what I can say is that, you know, we are a well-developed, very strong supply chain. Uh, as I said in my remarks today and the call, I've been incredibly impressed with the resiliency, the innovation, the agility that our organization has displayed, uh, during 2024, and it gives me the confidence as we navigate more complexities and circumstances in 2025. You know, I talk about focusing on controlling the controllables. You know, knowing what we control and then being a resilient agile organization that moves and grooves with where the industry and the circumstances that we need to to navigate complexity. And you know, we've got a powerful portfolio of brands that matter. We're proving that they can matter more every day. We're making progress with our relevance and our revenue, market share gains, you know, our ambitions are high. We've got more work to do, but we're building that from a much stronger foundation. And looking ahead, I'm excited about the future.

I was thinking back, uh, ahead of this interview to the last time the apparel industry had to deal with tariffs, and I remember walking into a handbag player. I'm like, these buttons suck. I saw what they did, Richard, they took the, they changed the quality of the products, the zippers, everything fell apart. I mean, but does this moment require you to rethink how a shirt is made? I mean, do you have to think of ways to take costs out of a product anywhere you could?

Our goal always is to minimize the impact to the consumer. We've got to work hard to do that with any cost inputs that happen. And you know, whether it's the price of cotton or oil or tariffs, these are circumstances that any high performing company needs to deal within their plans. So our ultimate goal as a consumer centric company is to minimize the impact on the consumer. So we're going to be working hard with our suppliers. Uh, we're looking at our cost base, uh, and we're going to need to balance all of that while protecting the structural economics of the business. We do not want to compromise the style, the quality of our product. That is upmost more important than anything, is that we reassure the consumer and deliver to the consumer. And again, on the backdrop of what was unfortunately a declining apparel industry, our brands grew share. So if we continue to do that really well, we will be able to overcome all of the challenges of geopolitical regulatory policy that come with running a business, when you really concentrate on executing with excellence for the consumer.

One other thing, just continuing my thread that your company may be in a different position than some of your competitors. You called out potential for $150 million in cost savings this year. That's a really big number, Richard. Where are those cost savings coming from? And will they flow directly to the bottom line? And then even, I guess, secondarily, do they completely offset the tariff impact?

Look, our cost savings is part of our strategic priorities. Strengthening and operational financial rigor is really going into the business, applying more disciplines to what we do every day. Where we find efficiencies, we're driving more effectiveness. And so we shared with you, we reduced our marketing spend as a percentage this year, but our brands resonated with consumers. So our marketing is more effective and yet it's more efficient. So we are spending less but driving better outcomes. With those savings, which we articulated at approximately $150 million, we're reinvesting and redeploying in areas that we believe will generate long-term shareholder value in technology, in modernity, in our tools, in various different ways of customer insights that lead our design and marketing teams to effectively drive better demand creation. All of that is the flywheel that ultimately, by being a high performing company, driving more efficiencies, redeploying those investments in the business, getting that top line and bottom line to continue in the direction that we are. Momentum is going to be there and we believe in the long term, we've got great opportunities to continue the growth.

Uh, so I'm on the, the Gap website, Richard, I go there quite frequently now, um, which is telling. Um, and I came away thinking, I'm like, I want most of this site. Nice. There's a lot of things that I would wear. No, no, no BS. No, no, full stop. How have you been able to, I guess, change the conversation around Gap? Because for years, Gap, I'm thinking, I'm going to get something there. The medium is going to fit like a large. It doesn't fit well. The stuff is not that cool, but I just need something to stuff in my closet. But the but it's actually I want this stuff now.

I, first of all, Brian, I love that. Um, and I love that you're seeing the difference both online and our stores and in our product. And I will tell you, it's a it's a real compliment to the team. They've been executing the reinvigoration playbook that we laid out with excellence. And you see it, Gap is back in the cultural conversation. The comps prove it all. I mean, we accelerated comps to 7% in the fourth quarter. It's the seventh consecutive quarter of market share gains. Um, Gap is now the 11th top ranked brand in the US. And we have every intention of continuing to rise in that ranking. Um, you see it, the the quarter has been fueled by innovation, better product, dialed up style, a lot more newness that's coming into the stores, and our marketing has been excellent. I mean, we drove a social first approach. We're seeing that resonate with a whole new generation. In fact, um, organic Google searches were up 6% on the year. Over the holiday, we saw a 25% increase in new customer visits online. So the intent that we have with better product and better storytelling and executing with excellence is resonating. Uh, the latest work that you might have seen, Parker Posey, uh, is really resonating. It's a unique creative format that ultimately really bridges the generation gap. So keep watching the site, go to our stores. We're not necessarily saying we've crossed the finish line. We've got work to do, but we're headed in the right direction and clearly the performance is showing up on the scoreboard.

Why, why is Athleta brand taking a while to turn around? Now, we've seen, Richard, to be fair, we've seen Lululemon struggle the past two quarters. They've had creative challenges as well. Is the category itself just coming off its peak? Is there something else you're seeing?

Yeah, it's a it's a great question and and I'm all I'm all in it. I mean, it is important to note, Athleta is the number three brand in the women's active space. So it's an important brand in the industry and it's an important brand in our portfolio. Also, when you look at the year, I know we manage the business quarter to quarter to quarter, but when you look at the year, we delivered a flat comp for the year. And that was up against a double digit decrease the year prior. So there's been a lot of improvements across key metrics and most importantly, Brian, on on in the category itself, despite our ambition wanting to see higher returns on top line, we gained market share. So the progress that we're making around the brand's identity, launching new activations, re-entering the cultural conversation, Simone Biles, Katie Ledecky, all of these various different cultural cues, as well as much better product, it is reinforcing the long-term opportunity. We are not saying that we're out of the woods yet. We've got work to do to continue to reset the brand. It was a tough quarter. We know exactly what we need to do to excite our core consumer during the holiday period next year. Our ambitions are high and we're going to get work to do to get it done.

Uh, Richard, lastly, before I let you go, a fun one. You know, I was thinking back to your days over at Jones, way back when. You've always been a pretty stylish guy. Where do you, where do you get that sense of style from?

Where do you get the sense of style? You're, you're my muse.

No, I mean, like, you really always like impeccably dressed. Like, where did, where does that come from, man?

I work for a fashion company. It's it's all around. You just got to go to any one of our stores.

Is that, is that bucket hat the must have item for the summer? It's at Banana Republic, right?

You're going to have it in every color.

I can't, I have been, Richard, full stop. I have not done a bucket hat since I think LL Cool J inspired me to wear a Kangol in the late 80s, early 90s. But I'm willing to give the Banana Republic, uh, hat a try. You got to do it, Brian. We're bridging the generation gap here. It's okay, you can, you can wear a bucket hat. Richard Dickson, thanks for giving us some time, uh, hot off your earnings call. Always a treat to get some time with you. Hope to see you in Cannes, Lions soon in a couple of months. Uh, perfect weather for bucket hats.

Thanks, Brian. I appreciate it. All right, I'll talk to you soon.