GPS
#<UNK>, you really pushed the button, you really pushed several of my hot buttons on this question so congratulations.
Again if you start with, where can we see start to see this roll out.
We're really pushing stretch in men's, which we're finding the men's customer really responds to across multiple fabrications and multiple wearing occasions.
So if you're in Old Navy today there's a stretch Oxford shirt in there that is super comfortable.
It's really like this precision fit.
We're pushing stretch across, in men's, our two key bottoms fabrications in terms of denim and twill, and both shorts and long bottoms.
And really testing where else we can go with it.
Because we believe that it's actually really revolutionizing in many respects.
That's a big word, but how men dress and the comfort and fit that they have in both tops and bottoms.
So that's a step.
We have nanotechnology in a pant in Banana that we have basically not marketed at all, which is highly stain resistant.
If you pour a cup of coffee on the pants, it beads up and runs off.
And we find that he has responded to that.
Right now, to be honest, we are more using pre-existing fiber and fabric innovation from our vendors.
We are also reorganizing in order to be able to work with some of our key vendors and be more proactive about driving innovation, which then we believe can unlock potentially some proprietary benefits.
And I don't want to get into that right now.
It's a much longer conversation and its early days but we feel that our scale and our size, working as a $16 billion enterprise for the company, has the potential to not just benefit from pre-existing innovation but drive innovation.
And so that's exciting for us as well.
And it's across a number of different dimensions, whether it's heat management, whether it's stain resistance, whether its stretch and comfort.
Just to name a few right now that are out there.
Yes.
Let me try to quickly hit the two.
On rebalancing fashion versus basics ---+ it's kind of an old term but I'll go with it for a second.
We needed to reestablish authority in some of our key item programs because we had moved away from that.
So you saw that happen in spring and summer ---+ big multi-cc knit programs, et cetera.
We were overassorted there and so we're learning season over season, and we've made some changes even after we booked in order to tighten some of our programs up.
So season over season, getting rebalanced for, again, key item programs but also making sure that we have depth in some of these fashion buys.
That's something that is going to get better every season.
I was just again in stores yesterday, and I saw Gap show up again with the first full fall and you'll see that again with more depth in fashion as we get into September.
So it's a season over season process, and one where we're actively learning and managing our buys as aggressively as we can.
On denim, I've obviously been tracking and reading all of the comments that have come out across the industry over the last several days and there's a bit of optimism about denim out there.
We're obviously extraordinarily well-positioned in the denim business across all our businesses.
Banana has a great denim business now as well and it's front of store.
I'm not ready to say ---+ I'm always hopeful about denim and it's been in a trough for a long time.
We are absolutely positioned to ride the rise of denim but I don't want to get frothy about talking about the fact that denim is now on a massive upturn and everything else.
I'm much more in the mode of under promising and trying to over deliver here.
I'm confident denim will come back because it has been in kind of a malaise.
We are well positioned across all of the bottoms fabrications whether it's from an active fabrication, a bistretch in a pant for a woman, a twill fabrication or denim, we are well positioned to play wherever the market goes.
Yes, and on the operating margin guidance, <UNK>, we don't guide specifically to expenses as you know.
But to try to be helpful, what I will remind is that we will continue for certain to be very disciplined with regard to our expense management.
We delivered not only in Q2 but I think for the entire first half on an adjusted basis, flat expenses and that isn't easy to get to because we are on many years now of managing these expenses pretty much flat.
And it gets harder in the second half.
The other reminder I'll just point to is that I've mentioned a couple times that because we are focused on improving the traffic we are making some investments in marketing in Q3.
<UNK> will jump in and I will jump in behind her.
Yes.
So I would say broadly speaking, North America is stronger than international.
It was interesting to see the UK retail sales come out this morning that were fairly strong.
So maybe that's European tourists going into the UK.
But broadly speaking there have been more challenges versus North America, and I would say that is probably somewhat attributable to global geopolitical uncertainties.
But it does vary by geography.
And it actually varies quarter by quarter.
Yes.
We're still bullish on our international business.
Obviously I'm committed to it.
But it's, honestly, you have to look country by country at the end of the day.
Old Navy, as an example, in North America and Canada, it's continued to be a very strong business.
If you look at what is I think a very interesting environment in China right now, in the space that we're in.
We are seeing the value business there, particularly with our Gap factory stores continue to be very good.
But the customer is somewhat standing on the sidelines, which has resulted in a lot of very aggressive and early sale activity across the whole specialty channel.
So it's hard to really generalize overall but I would agree with <UNK>.
North America better, and international more challenging.
I'd like to thank everyone for joining us on the call today.
As a reminder the press release, which is available on www.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.
