USA: Gap Inc. Reports Strong First Quarter Earnings Growth

Gap Inc. (NYSE:GPS) today announced record sales and earnings for the first quarter which ended Apr. 29, 2000. Earnings per share during the quarter rose 23 percent to $0.27 versus $0.22 the prior year. First quarter net sales rose 20 percent to $2.7 billion, compared with $2.3 billion in 1999. Comparable store sales decreased 2 percent versus an 11 percent increase last year. During the first quarter, the company's comparable store sales by division were as follows: -- Gap Domestic turned in a negative mid-single digit versus a positive mid-single digit last year-- Gap International had a positive mid-single digit versus positive high-twenties last year-- Banana Republic had a positive mid-single digit versus positive low-teens last year-- Old Navy turned in a negative low-single digit versus positive low-twenties last year.Total first quarter sales growth has averaged 30 percent during the past three years; comparable store sales increases have averaged 9 percent. Net earnings increased 16 percent in the first quarter to $235 million compared with $202 million last year. After-tax return on sales was 8.6 percent, down 30 basis points from last year. Millard S. Drexler, president and chief executive officer, said, " We had a strong quarter. Despite a slow Easter, we posted record results, with earnings per share up 23 percent in the first quarter over a 47 percent increase last year. Gap, Banana Republic and Old Navy all had positive earnings growth. These results show the strength of our brands and our management team in driving long-term growth." Store count and square footage at quarter end for 2000 and 1999 were as follows: