Pearson announces the disposal of Pearson Institute of Higher Education

Third Quarter Highlights *Delivered sales of $3.9 billion, up 16.9%, compared to the third quarter of 2021 on a reported and daily basis; up 20.3% on a daily, constant currency basis *Expanded gross margin by 145 bps compared to the third quarter of 2021 *Generated operating earnings of $603 million, up 37.6%, resulting in diluted EPS of $8.27, an increase of 46.4% versus the third quarter of 2021 *Produced $380 million in operating cash flow and returned $286 million to shareholders through dividends and share repurchases

Consumers spent $211.5 billion online during the second quarter of 2020, with e-commerce sales up 31.8% from the previous quarter, according to figures released by the Census Bureau of the Department of Commerce. E-commerce sales in the quarter accounted for 16.1% of total retail sales. The data showed that total retail sales decreased 3.6% in the same period. Compared to the year-ago period, second quarter 2020 e-commerce sales increased increased 44.5% while total retail sales decreased 3.6%.

Net sales by brand for the first quarter 2020 compared to the first quarter 2019 were as follows: *Old Navy Global: Net sales were down 42%; store sales were down 60% with online sales up 20%. Since the onset of the COVID-19 pandemic, Old Navy has seen a meaningful acceleration in its digital business. The Company noted it expects the off-mall, strip real estate that makes up approximately 75% of the fleet to be an advantage as customers return to stores and expects traffic in these locations to ramp up more quickly than other formats. *Gap Global: Net sales were down 50%; store sales were down 64% with online sales down 5%. Prior to the onset of the pandemic, Gap brand performance continued to be pressured by inconsistent execution of product and marketing messages. However, the Company noted the brand did experience steady improvements in its online performance throughout the quarter, attributable to the Company’s strategy to migrate customers online as the brand’s fleet rationalization efforts continue. *Banana Republic Global: Net sales were down 47%; store sales were down 61% with online sales down 2%. While the move to casual fashion during the stay-at-home requirements has benefited other brands in Gap Inc.’s portfolio, this shift left Banana Republic disadvantaged in its product mix. As a result, Banana Republic is taking aggressive action to adjust to consumer preferences and improve inventory mix. *Athleta: Net sales were down 8%; store sales were down 50% with online sales up 49%. Customer response to Athleta was strong given the values-driven active and lifestyle space the brand participates in as well as the brand’s deep customer engagement through its powerful omni-channel model. Operating loss was $1.2 billion. This reflects the decline in gross margin, as well as a non-cash impairment charge of $484 million related to the Company’s stores to reduce the carrying amount of the store assets and the corresponding operating lease assets to their fair values, which have dramatically declined as a result of the pandemic. The Company noted that as part of its ongoing specialty fleet optimization efforts, the Company has undertaken a strategic review of its real estate portfolio to further advance its long-term strategic priorities that include a smaller, healthier fleet, particularly as it relates to its Gap brand and Banana Republic specialty fleets.