Press Release

08/05/2010

Gap Inc. Reports July Sales

Company Guides Q2 EPS Above Last Year With Range of $0.34 to $0.35

SAN FRANCISCO – August 5, 2010 – Gap Inc. (NYSE: GPS) today reported net sales increased 3 percent to $948 million for the four-week period ended July 31, 2010 compared with net sales of $924 million for the four-week period ended August 1, 2009. The company’s comparable store sales for July 2010 were up 1 percent compared with an 8 percent decrease in July 2009.

“We’re pleased that we delivered top line sales growth for July and the second quarter and that all of our brands cleared summer merchandise,” said Sabrina Simmons, chief financial officer of Gap Inc.  “Looking ahead, we’re focused on offering customers strong value for back to school.” 

Comparable store sales for July 2010 were as follows:

  • Gap North America: negative 6 percent versus negative 9 percent last year
  • Banana Republic North America: positive 2 percent versus negative 7 percent last year
  • Old Navy North America: positive 6 percent versus negative 8 percent last year
  • International: positive 3 percent versus negative 4 percent last year

Second Quarter Sales Results and Guidance

The company expects diluted earnings per share for the second quarter of fiscal year 2010 to be $0.34 to $0.35, up from $0.33 for the second quarter last year. 

For the thirteen weeks ended July 31, 2010, total company net sales were $3.32 billion, which is an increase of 2 percent compared with net sales of $3.25 billion for the thirteen weeks ended August 1, 2009. The company’s second quarter comparable store sales increased 1 percent compared with a decrease of 8 percent in the second quarter last year.

Comparable store sales for the second quarter of fiscal year 2010 were as follows:

  • Gap North America: negative 4 percent versus negative 10 percent last year
  • Banana Republic North America: positive 3 percent versus negative 15 percent last year
  • Old Navy North America: positive 2 percent versus negative 4 percent last year
  • International: positive 3 percent versus negative 5 percent last year

For more detailed information regarding the company’s July 2010 sales, please call 1-800-GAP-NEWS (1-800-427-6397) to listen to Gap Inc.’s monthly sales recording. International callers may call 706-634-4421.

Gap Inc. will release its second quarter earnings via press release on August 19, 2010 at 1:00 p.m. Pacific Time. In addition, the company will host a summary of Gap Inc.’s second quarter results in a live conference call and webcast at approximately 2:00 p.m. Pacific Time. The conference call can be accessed by calling 1-800-374-0168, and international callers may dial 706-634-0994. The webcast can be accessed at www.gapinc.com.

August Sales

The company will report August sales on September 2, 2010.

Forward-Looking Statements

This press release and related recording contain unaudited financial information and forward-looking statements within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. All statements other than those that are purely historical are forward-looking statements. Words such as “expect,” “anticipate,” “believe,” “estimate,” “intend,” “plan,” “project,” and similar expressions also identify forward-looking statements. Forward-looking statements include statements regarding earnings per share for the second quarter of fiscal year 2010.

Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause the company’s actual results to differ materially from those in the forward-looking statements. These factors include, without limitation, the risk that additional information may arise during the company’s close process or as a result of subsequent events that would require the company to make adjustments to the financial information. Additional information regarding factors that could cause results to differ can be found in the company’s Annual Report on Form 10-K for the fiscal year ended January 30, 2010. Readers should also consult the company’s quarterly report on Form 10-Q for the fiscal quarter ended May 1, 2010.

These forward-looking statements are based on information as of August 5, 2010. The company assumes no obligation to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.

About Gap Inc.

Gap Inc. is a leading global specialty retailer offering clothing, accessories, and personal care products for men, women, children, and babies under the Gap, Banana Republic, Old Navy, Piperlime, and Athleta brands. Fiscal 2009 sales were $14.2 billion. Gap Inc. operates about 3,100 stores in the United States, Canada, the United Kingdom, France, Ireland, and Japan. In addition, Gap Inc. is expanding its international presence with franchise agreements in Asia, Australia, Europe, Latin America, and the Middle East. For more information, please visit www.gapinc.com.

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