GAP (GAP) risk factors, FY2025 10-K

Risks Related to Macroeconomic Conditions

1. 01Global economic conditions have and could continue to adversely affect our business, financial condition, and results of operations

Risks Related to Competition, Brand Relevance, and Brand Execution

1. 02Our business is highly competitive
2. 03We must successfully gauge apparel trends and changing consumer preferences to succeed
3. 04We must maintain our reputation and brand image
4. 05We must successfully implement our marketing efforts

Risks Related to Our Business Operations

1. 06If we are unable to manage our inventory and fulfillment operations effectively, our results of operations could be adversely affected
2. 07Failure to protect our inventory from loss and theft may adversely affect our results of operations
3. 08Trade matters may disrupt our supply chain
4. 09Independent third parties manufacture all of our products for us. As a result, we are directly impacted by increases in the cost of those products
5. 10Risks associated with importing merchandise from foreign countries, including failure of our vendors to adhere to our Code of Vendor Conduct, could harm our business
6. 11Our failure to manage key executive succession and retention and to continue to attract qualified personnel could adversely affect our results of operations
7. 12The global market for real estate is competitive

Risks Related to Strategic Transactions and Investments

1. 13Our franchise and licensing businesses are subject to certain risks not directly within our control that could impair the value of our brands
2. 14Our efforts to expand internationally may not be successful
3. 15Our investments in customer, digital, omni-channel, and other strategic initiatives may not deliver the results we anticipate
4. 16We have and may continue to engage in or seek to engage in strategic transactions, such as acquisitions, partnerships, divestitures, and other dispositions, that are subject to various risks and uncertainties and which could disrupt or adversely affect our business

Risks Related to Information Security and Technology

1. 17We are subject to data and security risks, which could adversely affect our operations and consumer confidence in our security measures or result in liability
2. 18Failures of, or updates or changes to, our information technology systems may disrupt operations
3. 19Our technology systems that support our e-commerce platform may not be effective or function properly

Financial Risks

1. 20Reductions in income and cash flow from our private label and co-branded credit card programs could adversely affect our results of operations and financial condition
2. 21Our business is exposed to the risks of foreign currency exchange rate fluctuations and our hedging strategies may not be effective in mitigating those risks
3. 22We experience fluctuations in our comparable sales and margins, which could adversely affect the market price of our common stock, our credit ratings, and our liquidity
4. 23Our level of indebtedness may adversely affect our ability to operate and expand our business
5. 24We may not be able to generate sufficient cash to service all of our indebtedness and fund our working capital and capital expenditures, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful
6. 25Covenants in the ABL Facility may restrict our business and could limit our ability to implement our business plan
7. 26Changes in our credit profile or deterioration in market conditions may limit our access to the capital markets and adversely impact our business and financial condition

Risks Related to Sustainability and Climate Change

1. 27Our business is subject to evolving regulations and expectations with respect to environmental, social, and governance ("ESG") matters that could expose us to numerous risks
2. 28Climate change may have an adverse impact on our business

General Risks

1. 29Our business and results of operations could be adversely affected by natural disasters, public health crises, political crises, negative global climate patterns, or other catastrophic events
2. 30Failure to comply with applicable laws and regulations, and changes in the regulatory or administrative landscape, could adversely affect our business, financial condition, and results of operations
3. 31We are subject to various proceedings, lawsuits, disputes, and claims from time to time, which could adversely affect our business, financial condition, and results of operations