Gap (GPS)

First Quarter Sales Results and Earnings Guidance

For the thirteen weeks ended May 5, 2007, total company net sales were $3.56 billion, which is an increase of 3 percent as compared to net sales of $3.44 billion for the thirteen weeks ended April 29, 2006. Due to the 53^rd week in fiscal year 2006, first quarter comparable store sales are compared to the thirteen weeks ended May 6, 2006. The company’s first quarter comparable store sales decreased 4 percent compared with a decrease of 9 percent in the first quarter of the prior year.

The company expects diluted earnings per share on a GAAP basis for the first quarter of fiscal year 2007 to be $0.20 to $0.22. This includes a benefit of about $0.01 from tax rate adjustments impacting the first quarter and about $37 million in expenses related to the planned closure of Forth & Towne in June 2007. Excluding the Forth & Towne expenses, the company expects diluted earnings per share for the first quarter of fiscal year 2007 to be $0.23 to $0.25. Please see the reconciliation of expected earnings per share excluding the above expense, a non-GAAP financial measure, to a GAAP financial measure in the table at the end of this release.

The company reiterated that it expects year-over-year change in inventory per square foot to be flat at the end of the first quarter.

Comparable store sales by division for the first quarter were as follows:

As of May 5, 2007, Gap Inc. operated 3,154 store locations compared with 3,070 store locations last year.

For more detailed information, please call 1-800-GAP-NEWS to listen to Gap Inc.’s monthly sales recording. International callers may call 706-634-4421.

Gap Inc. will release its first quarter earnings via press release on May 24, 2007, at 1:30 p.m. Pacific Time. In addition, the company will host a summary of Gap Inc.’s first 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 800-374-0168 and international callers may dial 706-634-0994. The webcast can be accessed at www.gapinc.com.

Gap Inc. will announce May sales on June 7, 2007.

Third Quarter Sales Results and Earnings Guidance

For the 13 weeks ended October 28, 2006, total company net sales were $3.86 billion, which is flat compared to net sales of $3.86 billion for the same period ended October 29, 2005. The company’s third quarter comparable store sales decreased 5 percent compared with a decrease of 7 percent in the third quarter of the prior year.

The company announced that it expects earnings per share for the third quarter to be $0.21 to $0.23. Expected third quarter earnings per share includes about one cent of benefit from a tax rate adjustment.

The company reiterated that it expects year-over-year inventory per square foot to be flat at the end of the third quarter.

Comparable store sales by division for the third quarter were as follows:

As of October 28, 2006, Gap Inc. operated 3,157 store locations compared with 3,117 store locations last year.

For more detailed information, please call 1-800-GAP-NEWS to listen to Gap Inc.’s monthly sales recording. International callers may call 706-634-4421.

Gap Inc. will release its third quarter earnings via press release on November 16, 2006, at 1:30 p.m. Pacific Time. In addition, the company will host a summary of Gap Inc.’s third 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 800-374-0168 and international callers may dial 706-634-0994. The webcast can be accessed at www.gapinc.com.

Gap Inc. will announce November sales on November 30, 2006.

Second Quarter Sales Results and Earnings Guidance

For the 13 weeks ended July 29, 2006, total company net sales were $3.72 billion, which is flat compared to net sales of $3.72 billion for the same period ended July 30, 2005. The company’s second quarter comparable store sales decreased 5 percent compared with a decrease of 3 percent in the second quarter of the prior year.

The company expects earnings per share for the second quarter to be $0.13 to $0.15. This is primarily due to a combination of merchandise margin pressure and continued investments in selling, general and administrative expenses to support the second half, and longer term growth objectives.

The company expects year-over-year inventory per square foot to be down in the low single digits at the end of the second quarter compared to prior year.

Comparable store sales by division for the second quarter were as follows:

Gap North America: negative 6 percent versus negative 4 percent last year

Banana Republic North America: negative 1 percent versus negative 3 percent last year

Old Navy North America: negative 5 percent versus negative 4 percent last year

International: negative 11 percent versus positive 1 percent last year

As of July 29, 2006, Gap Inc. operated 3,085 store locations compared with 3,029 store locations last year.

First Quarter Sales Results and Earnings Guidance

For the 13 weeks ended April 29, 2006, total company net sales were $3.44 billion, which is a decrease of 5 percent to net sales of $3.63 billion for the same period ended April 30, 2005. The company’s first quarter comparable store sales decreased 9 percent compared with a decrease of 4 percent in the first quarter of the last year.

The company announced that it expects earnings per share for the first quarter to be $0.26 to $0.27.

The company reiterated that it expects year-over-year inventory per square foot to be down in the low-single digits at the end of the first quarter.

Comparable store sales by division for the first quarter were as follows:

Gap North America: negative 8 percent versus negative 4 percent last year

Banana Republic North America: negative 5 percent versus negative 4 percent last year

Old Navy North America: negative 11 percent versus negative 4 percent last year

International: negative 11 percent versus negative 6 percent last year

As of April 29, 2006, Gap Inc. operated 3,070 store locations compared with 3,010 store locations last year.

For more detailed information, please call 1-800-GAP-NEWS to listen to Gap Inc.’s monthly sales recording. International callers may call 706-634-4421.

Gap Inc. will release its first quarter earnings via press release on May 18, 2006 at 1:30 p.m. Pacific Time. In addition, the company will host a summary of Gap Inc.’s first 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 800-374-0168 and international callers may dial 706-634-0994. The webcast can be accessed at www.gapinc.com.

Gap Inc. will announce May sales on June 1, 2006

Third Quarter Sales Results and Earnings Guidance

For the 13 weeks ended October 29, 2005, total company net sales were $3.9 billion, which is a decrease of 3 percent from net sales of $4.0 billion for the same period ended October 30, 2004. The company’s third quarter comparable store sales decreased 7 percent compared with a decrease of 1 percent in the third quarter of the prior year.

The company announced that it expects earnings per share for the third quarter to be $0.23 to $0.24.

The company reiterated that it expects year-over-year inventory per square foot to be down in the low-single digits at the end of the third quarter.

Comparable store sales by division for the third quarter were as follows:

Gap North America: negative 4 percent versus flat last year

Banana Republic North America: negative 7 percent versus positive 3 percent last year

Old Navy North America: negative 8 percent versus negative 1 percent last year

International: negative 10 percent versus negative 10 percent last year

As of October 29, 2005, Gap Inc. operated 3,117 store locations compared with 3,051 store locations last year.

For more detailed information, please call 1-800-GAP-NEWS to listen to Gap Inc.’s monthly sales recording. International callers may call 706-634-4421.

Gap Inc. will release its third quarter earnings via press release on November 17, 2005 at 1:30 p.m. Pacific Time. In addition, the company will host a summary of Gap Inc.’s third 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 800-374-0168 and international callers may dial 706-634-0994. The webcast can be accessed at www.gapinc.com.

Gap Inc. will announce November sales on December 1, 2005.

Second Quarter Sales Results and Earnings Guidance

For the 13 weeks ended July 30, 2005, total company net sales were $3.72 billion, compared to net sales of $3.72 billion for the same period ended July 31, 2004. The company’s second quarter comparable store sales decreased 3 percent compared with flat comparable store sales in the second quarter of the prior year.

Comparable store sales by division for the second quarter were as follows:

Gap North America: negative 4 percent versus positive 1 percent last year

Banana Republic North America: negative 3 percent versus positive 4 percent last year

Old Navy North America: negative 4 percent versus flat last year

International: positive 1 percent versus negative 10 percent last year

The company announced that it expects earnings per share for the second quarter to be $0.28 to $0.29. A one-time reversal of a sublease loss reserve and the absence of premiums paid on early

retirement of debt together represent about $123 million of pre-tax benefit versus last year, or about $0.08 per share for the second quarter.

Gap Inc. plans to provide an in-depth review of it second quarter results and review its full year 2005 financial guidance during the company’s 2005 second quarter earnings conference call, which is scheduled for Thursday, August 18, 2005.

The company reiterated that it expects year-over-year inventory per square foot at the end of the second quarter to be down on percentage point basis in the low single digits compared to last year.

As of July 30, 2005, Gap Inc. operated 3,029 store locations compared with 2,999 store locations last year.

For more detailed information, please call 1-800-GAP-NEWS 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 18, 2005 at 1:30 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 800-374-0168 and international callers may dial 706-634-0994. The webcast can be accessed at www.gapinc.com .

Gap Inc. will announce August sales on September 1, 2005.

First Quarter Sales Results and Earnings Guidance

For the 13 weeks ended April 30, 2005, total company net sales were $3.6 billion, which is a decrease of 1 percent from net sales of $3.7 billion for the same period ended May 1, 2004. The company’s first quarter comparable store sales decreased 4 percent compared with an increase of 7 percent in the first quarter of the prior year.

Comparable store sales by division for the first quarter were as follows:

Gap North America: negative 4 percent versus positive 4 percent last year

Banana Republic North America: negative 4 percent versus positive 21 percent last year

Old Navy North America: negative 4 percent versus positive 9 percent last year

International: negative 6 percent versus negative 5 percent last year

The company announced that it expects earnings per share for the first quarter to be $0.29 to $0.30. The company reiterated that it expects earnings per share for the full year to be $1.41 to $1.45.

The company now expects inventory per square foot at the end of the first quarter to be up in the mid-single digits on a percentage point basis to last year, driven primarily by the timing associated with the early receipt of merchandise.

As of April 30, 2005, Gap Inc. operated 3,010 store locations compared with 3,016 store locations last year.

For more detailed information, please call 1-800-GAP-NEWS to listen to Gap Inc.’s monthly sales recording. International callers may call 706-634-4421.

Gap Inc. will release its first quarter earnings via press release on May 19, 2005 at 1:30 p.m. Pacific Time. In addition, the company will host a summary of Gap Inc.’s first 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 800-374-0168 and international callers may dial 706-634-0994. The webcast can be accessed at www.gapinc.com.

Gap Inc. will announce May sales on June 2, 2005.

Fourth Quarter Sales Results and Earnings Guidance

For the 13 weeks ended January 29, 2005, total company net sales were $4.9 billion, which is flat to net sales of $4.9 billion for the same period ended January 31, 2004. The company’s fourth quarter comparable store sales decreased 3 percent compared with an increase of 3 percent in the fourth quarter of the prior year.

The company announced that it expects earnings per share for the fourth quarter to be $0.36 to $0.38. The company now expects to report full year operating margin, excluding expenses related to early debt retirement, at the lower end of its previously stated 12.5 to 13 percent range. The company expects earnings per share for the full year to be $1.17 to $1.18.

The company now expects year-over-year inventory per square foot to be up in the mid single digits on a percentage basis at the end of the fourth quarter.

Comparable store sales by division for the fourth quarter were as follows:

Gap U.S.: flat versus positive 2 percent last year

Gap International: negative 8 percent versus negative 2 percent last year

Banana Republic: negative 1 percent versus positive 9 percent last year

Old Navy: negative 4 percent versus positive 4 percent last year

Year-to-date net sales of $16.3 billion for the 52 weeks ended Jan. 29, 2005, represent an increase of 3 percent over net sales of $15.9 billion for the same period ended Jan. 31, 2004. The company’s year-to-date comparable store sales were flat compared with an increase of 7 percent in the prior year.

As of January 29, 2005, Gap Inc. operated 2,994 store locations compared with 3,022 store locations last year.

For more detailed information, please call 1-800-GAP-NEWS to listen to Gap Inc.’s monthly sales recording. International callers may call 706-634-4421.