GPS
#Thanks, <UNK>.
I will start, <UNK>, with Q2 and marketing was down, driven primarily by Banana and then the absence of Piperlime, and a little bit of Gap.
For Q3, we will probably expect it to be down again.
You might remember, we had a fall campaign for Gap last year, which we're not anniversarying.
We're probably going to be down some, because of that alone, and also the absence of Piperlime.
No other dramatic changes.
We might even invest a little more in other brands like Old Navy.
I would say it's probably a little early to talk about holiday, because we haven't finished those plans, but I don't know, <UNK>, if you want to add anything.
I will give a somewhat trite answer, honestly, but nonetheless I think one that I feel pretty strongly about which is, the best marketing is good product.
And if I look at Gap as an example, we drove a strong business back a couple years ago in spring of 2012 with modest marketing, but exceptional product.
And so what I can say is that as we feel better about the product, that will help us think about the marketing that we are willing to put behind it.
But I do believe that your marketing should lag good product, and that a lot of what will drive the bounce in the business is good product in the stores, which then puts the marketing behind in maybe the next period.
So we're managing it very carefully, and again, as <UNK> said, too soon to talk about what we are going to do in Q4.
It's not really there yet.
Directionally, <UNK>, I would tell you for sure Gap is going to be the tightest, followed closely by Banana.
Because of their performance year to date, and because of ---+ we have the most confidence behind Old Navy, we're going to be very tight with Gap and Banana.
And then, to your point, Old Navy is still manage for their sales levels tightly.
They're going to have more inventory, for sure, to feed their momentum.
But I think they're onto something really good, and we're all holding hands, and would like to see a little improvement in turn as we go forward.
I think across the board, tight, but directionally Old Navy is definitely going to be inventory better than Gap or BR.
Starting with ROD, you are correct <UNK>.
We have said that most recently it would take a low to mid single positive comp to leverage ROD, for the reasons you laid out, more of the mix for international and some higher rents.
With regard to the impact of the store closures on ROD, I would say it's not going to be that meaningful, and the reason is you'll recall that the stores we're closing mostly in the lower quality centers.
And in those centers, we actually had pretty favorable rents.
When we take those out of the portfolio, it doesn't really help your ROD leverage much, because as a percent to rent, that wasn't the issue with those stores.
It was more brand positioning with those stores.
If you just go to categories, and I'll be consistent here and not call significant change in the business in the back half, even though the team has been able to make some incremental changes as they look at both fall and holiday.
So if I look at Gap order, I expect bounce as we're getting the aesthetic on trend, quality, et cetera, on track.
You can just look at the public data and see where we've given up market share.
Mix is a big category in women's where we gave up market share.
It is a mixed cycle right now.
It is an opportunity for us to get our share and more than our fair share.
Denim is coming back, which is a place that powers the brand, and I believe we have really good product development in the pipeline.
And those are two big categories for the brand, and should always be brand drivers for Gap.
I'll just stop there at the moment.
The team has obviously been focused across the entire assortment, but to be able to ride the bounce in denim, and then reclaim and more sell our fair share in knits is a big opportunity for us.
Amber, we have got time for one more question.
You're right.
You're right, <UNK>.
It's a good call-out.
Just before, as we were putting into the public announcement, we started taking some small actions in the first quarter, related mostly to some inventory and related to the store closures.
And when we gave our initial estimate on June 15, it included a little bit of that action we had already taken in Q1, building into the announcement.
So consistent with that, the number we just gave out for the first half has a little bit of spend in Q1, as once it was announced, we accumulated the total charges.
Correct.
The franchise operations continues to be a business that we believe in really strongly.
Obviously, also, some foreign-exchange headwinds there, which we don't call out separately.
But we're bullish on it, and now, we're really just starting to put Old Navy into the mix, and so far the redone Old Navy in the Middle East and in the Philippines has been very positive for us.
I don't want to go into a lot more detail right now, but it's a business that we are long-term committed to, and getting Old Navy in the mix was pretty powerful for us.
Great.
I'd like to thank everyone for joining us on the call today.
As a reminder, the press release, which is available on GapInc.com contains a full recap of our second-quarter results, as well as the forward-looking guidance included in our prepared remarks.
As always, the Investor Relations team will be available after the call for further questions.
Thank you all.
