Gap Inc (NYSE:GPS) today reported sales of $1.17 billion for the five weeks ended July 1, 2000, an increase of 19 per cent over sales of $977 million for the comparable period ended July 3, 1999.

The company's comparable store sales for June 2000 decreased 2 per cent compared to a 13 per cent increase in June 1999.

The company's June comparable store sales by division were as follows: Gap Domestic had a positive low-single digit versus a positive low-single digit last year; Gap International had a flat comp versus positive mid-teens last year; Banana Republic had a positive low-single digit versus positive low-teens last year; and Old Navy had a negative high-single digit versus positive mid-thirties last year.

Sales of $4.83 billion for the 22 weeks ended July 1, 2000, represent an increase of 20 per cent over sales of $4.04 billion for the same period in 1999. The company's year-to-date comparable store sales decreased 2 per cent compared to an 11 per cent increase a year ago.

As of July 1, 2000, Gap Inc operated 3,224 stores compared to 2,630 at July 3, 1999, an increase of 23 per cent.

As a result of the lower, quarter-to-date reported margins, the company believes that earnings for the second quarter will likely come in approximately three cents below the current consensus estimate of $0.26. Despite the second quarter business shortfall, the company does not anticipate changes to the third and fourth quarter range of analyst estimates.


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Forward-Looking Statements

The information made available in this press release contains certain forward-looking statements that reflect Gap Inc.'s current view of future events and financial performance. Wherever used, the words "expect," "plan," "anticipate," "believe" and similar expressions identify forward-looking statements. Any such forward-looking statements are subject to risks and uncertainties and the company's future results of operations could differ materially from historical results or current expectations. Some of these risks include, without limitation, ongoing competitive pressures in the apparel industry, risks associated with challenging international retail environments, changes in the level of consumer spending or preferences in apparel, trade restrictions and political or financial instability in countries where the company's goods are manufactured and/or other factors that may be described in the company's annual report on Form 10-K and/or other filings with the Securities and Exchange Commission. Future economic and industry trends that could potentially impact revenues and profitability are difficult to predict.