What the changes say
- Gap Inc. added specific risks concerning new U.S. tariffs and the integration of artificial intelligence into its operations.
- The company consolidated disclosures on debt, data security, and sustainability matters.
- Supply chain and inventory management risks were refined to emphasize trend forecasting and vendor dependencies.
What changed since the prior 10-K
New
- NewRisks Related to Macroeconomic Conditions
Our business is impacted by global economic conditions and the related impact on consumer spending
- NewRisks Related to Macroeconomic Conditions
Trade matters, including the imposition of tariffs by the United States, have had, and could continue to have, an adverse effect on our business
The United States enacted significant tariffs on imported goods during fiscal 2025, which increased cost of goods sold and created ongoing trade policy uncertainty after the U.S. Supreme Court invalidated IEEPA tariffs.
- NewRisks Related to Macroeconomic Conditions
in part. To the extent that our supply chain, costs, sales, or profitability are negatively impacted by these tariffs or other trade actions, or if there is an escalation of tariffs or other trade restrictions, our business, financial condition, and results of operations could be adversely affected
- NewRisks Related to Strategic Initiatives and Investments
We may engage in or seek to engage in strategic transactions, such as acquisitions, partnerships, divestitures, or other dispositions. For example, in recent years, we transferred our Europe, Mexico, and China businesses to a partnership model
- NewRisks Related to Information Security and Technology
partners, suppliers, and third-party service providers, including those on which this type of information is stored, processed, and maintained is critical to our business operations. These networks and systems are subject to an increasing threat of continually evolving data and security risks
- NewRisks Related to Information Security and Technology
Our efforts to integrate AI into our business operations may not be successful and could result in liability
Integrating AI and data science across operations presents risks of algorithmic flaws, data privacy concerns, intellectual property disputes, and potential legal liability from inaccurate or harmful work product.
- NewRisks Related to Sustainability and Climate Change
adverse impacts. Any of these risks could adversely affect our business, financial condition, results of operations, and reputation
Sustainability initiatives and goals are based on evolving standards and metrics, and failure to meet these goals or inaccurate reporting could damage our reputation and business.
Dropped
- DroppedRisks Related to Macroeconomic Conditions
Global economic conditions have and could continue to adversely affect our business, financial condition, and results of operations
- DroppedRisks Related to Our Business Operations
Trade matters may disrupt our supply chain
- DroppedRisks Related to Strategic Transactions and Investments
We 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
- DroppedFinancial Risks
We 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
- DroppedFinancial Risks
Covenants in the ABL Facility may restrict our business and could limit our ability to implement our business plan
Reworded
- 92% rewrittenRisks Related to Information Security and Technology
We are subject to data and security risks, which could adversely affect our operations and consumer confidence in our security measures or result in liability
- 72% rewrittenFinancial Risks
Our indebtedness may adversely affect our ability to operate and expand our business
Streamlined risk language regarding indebtedness by removing detailed bullet points on the $1.5 billion Senior Notes and ABL Facility impacts.
Was: Our level of indebtedness may adversely affect our ability to operate and expand our business
- 58% rewrittenRisks Related to Sustainability and Climate Change
Our business is subject to evolving regulations and expectations with respect to sustainability matters that could expose us to numerous risks
Was: Our business is subject to evolving regulations and expectations with respect to environmental, social, and governance ("ESG") matters that could expose us to numerous risks
- 51% rewrittenRisks Related to Strategic Initiatives and Investments
Our investments in customer, digital, AI, omni-channel, and other strategic initiatives may not deliver the results we anticipate
Expanded the strategic initiatives risk to explicitly state that the company has made and will continue to make investments in strategic initiatives across the business.
Was: Our investments in customer, digital, omni-channel, and other strategic initiatives may not deliver the results we anticipate
- 45% rewrittenRisks Related to Our Business and Operations
Independent vendors manufacture almost all of our products outside of our principal sales markets. As a result, we are directly impacted by increases in the cost of those products, including costs to transport those products to our principal sales markets
Was: Independent third parties manufacture all of our products for us. As a result, we are directly impacted by increases in the cost of those products
- 45% rewrittenRisks Related to Our Business and Operations
We must effectively manage our inventory and fulfillment operations
Removed supply chain disruption causes from the inventory risk and added specific commentary on past failures to accurately predict customer preferences for trend items leading to excessive markdowns.
Was: If we are unable to manage our inventory and fulfillment operations effectively, our results of operations could be adversely affected
- 42% rewrittenRisks Related to Strategic Initiatives and Investments
Our franchise and licensing businesses are subject to certain risks not directly within our control
Was: Our franchise and licensing businesses are subject to certain risks not directly within our control that could impair the value of our brands
- 41% rewrittenRisks Related to Competition, Brand Relevance, and Brand Execution
We must successfully gauge apparel trends and changing consumer preferences to succeed
Shifted supply chain disruption language from a conditional future risk to an active past and ongoing experience affecting inventory delivery timelines.
- 39% rewrittenFinancial Risks
Our business is exposed to the risks of foreign currency exchange rate fluctuations and our hedging strategies may not be effective in mitigating those risks
- 34% rewrittenFinancial Risks
Changes in our credit profile or deterioration in market conditions may limit our access to the capital markets
Was: Changes 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
- 30% rewrittenFinancial Risks
We may experience reductions in income and cash flow from our private label and co-branded credit card programs
Was: Reductions 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
- 27% rewrittenRisks Related to Our Business and Operations
The global market for real estate is competitive
- 25% rewrittenRisks Related to Competition, Brand Relevance, and Brand Execution
We must maintain our reputation and brand image
- 23% rewrittenRisks Related to Strategic Initiatives and Investments
Our efforts to expand internationally may not be successful
- 22% rewrittenRisks Related to Our Business and Operations
We must effectively manage key executive succession and retention and continue to attract qualified personnel
Was: Our failure to manage key executive succession and retention and to continue to attract qualified personnel could adversely affect our results of operations
All 33 risk factors
Headings as the filing states them, in filing order.
Risks Related to Macroeconomic Conditions
- 01Our business is impacted by global economic conditions and the related impact on consumer spendingNew
- 02Trade matters, including the imposition of tariffs by the United States, have had, and could continue to have, an adverse effect on our businessNew
- 03in part. To the extent that our supply chain, costs, sales, or profitability are negatively impacted by these tariffs or other trade actions, or if there is an escalation of tariffs or other trade restrictions, our business, financial condition, and results of operations could be adversely affectedNew
Risks Related to Competition, Brand Relevance, and Brand Execution
- 04Our business is highly competitive
- 05We must successfully gauge apparel trends and changing consumer preferences to succeed41% rewritten
- 06We must maintain our reputation and brand image25% rewritten
- 07We must successfully implement our marketing efforts
Risks Related to Our Business and Operations
- 08We must effectively manage our inventory and fulfillment operations45% rewritten
- 09We must protect our inventory from loss and theft
- 10Independent vendors manufacture almost all of our products outside of our principal sales markets. As a result, we are directly impacted by increases in the cost of those products, including costs to transport those products to our principal sales markets45% rewritten
- 11We must effectively manage key executive succession and retention and continue to attract qualified personnel22% rewritten
- 12The global market for real estate is competitive27% rewritten
- 13Our business could be adversely affected by natural disasters, public health crises, political crises, negative global climate patterns, or other catastrophic events
Risks Related to Strategic Initiatives and Investments
- 14Our franchise and licensing businesses are subject to certain risks not directly within our control42% rewritten
- 15Our efforts to expand internationally may not be successful23% rewritten
- 16Our investments in customer, digital, AI, omni-channel, and other strategic initiatives may not deliver the results we anticipate51% rewritten
- 17We may engage in or seek to engage in strategic transactions, such as acquisitions, partnerships, divestitures, or other dispositions. For example, in recent years, we transferred our Europe, Mexico, and China businesses to a partnership modelNew
Risks Related to Information Security and Technology
- 18We are subject to data and security risks, which could adversely affect our operations and consumer confidence in our security measures or result in liability92% rewritten
- 19partners, suppliers, and third-party service providers, including those on which this type of information is stored, processed, and maintained is critical to our business operations. These networks and systems are subject to an increasing threat of continually evolving data and security risksNew
- 20Our efforts to integrate AI into our business operations may not be successful and could result in liabilityNew
- 21Failures of, or updates or changes to, our information technology systems may disrupt operations
- 22Our technology systems that support our e-commerce platform may not be effective or function properly
Financial Risks
- 23We may experience reductions in income and cash flow from our private label and co-branded credit card programs30% rewritten
- 24Our business is exposed to the risks of foreign currency exchange rate fluctuations and our hedging strategies may not be effective in mitigating those risks39% rewritten
- 25We 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
- 26Our indebtedness may adversely affect our ability to operate and expand our business72% rewritten
- 27Changes in our credit profile or deterioration in market conditions may limit our access to the capital markets34% rewritten
Risks Related to Sustainability and Climate Change
- 28Our business is subject to evolving regulations and expectations with respect to sustainability matters that could expose us to numerous risks58% rewritten
- 29adverse impacts. Any of these risks could adversely affect our business, financial condition, results of operations, and reputationNew
- 30Climate change may have an adverse impact on our business
Legal, Regulatory, and Compliance Risks
- 31We must comply with applicable laws and regulations and manage changes in the regulatory and administrative landscape
- 32Our vendors’ failure to adhere to our Code of Vendor Conduct could harm our business
- 33We are subject to various proceedings, lawsuits, disputes, and claims from time to time
Other GAP 10-Ks
- FY2025 10-K risk factors31 risks
Gap Inc. faces significant risk from intense apparel retail competition and changing consumer trends across its brands like Old Navy, Gap, Banana Republic, and Athleta. Operations rely entirely on third-party manufacturing partners, international sourcing, and complex supply chains subject to trade and tariff disruptions. Financial health depends heavily on debt servicing, credit card program revenues with Barclays, and effective inventory management.
Filed Mar 18, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.