Gap reports Q3 gross margin 41.3%, up 390 basis points

Gross margin of 41.3% increased 390 basis points versus last year’s reported gross margin and increased 260 basis points versus last year’s adjusted gross margin which excluded $53M in impairment charges related to the decision to discontinue the Yeezy Gap business. Merchandise margin increased 460 basis points versus last year on a reported basis. Compared to last year’s adjusted rate, merchandise margin increased 340 basis points primarily due to lower commodity costs and improved promotional activity in the quarter.