Gap (GPS)

SAN FRANCISCO – May 22, 2008 – With its focus on driving bottom-line earnings, Gap Inc. (NYSE: GPS) today released its earnings results for the first quarter of 2008 and delivered an increase in earnings per share over the previous year. 

For the quarter ended May 3, 2008, net earnings for the company increased 40 percent to $249 million, or $0.34 per share on a diluted basis, compared with $178 million, or $0.22 per share, for the first quarter last year.

Earnings from continuing operations for the first quarter of 2008 were $249 million compared with $205 million last year which represents an increase of 21 percent. Earnings from continuing operations exclude the loss from the discontinued operation of Forth & Towne.

First quarter net sales were $3.38 billion, compared with $3.55 billion for the first quarter of last year. The company’s first quarter comparable store sales decreased 11 percent, compared with a decrease of 4 percent in the first quarter of the prior year. The company’s online sales for the first quarter increased 21 percent to $236 million, compared with $195 million for the first quarter of last year.

“We are pleased with our first quarter results, as we delivered solid earnings growth in a difficult environment,” said Glenn Murphy, chairman and chief executive officer of Gap Inc. “Looking ahead, we are focused on bringing compelling product and shopping experiences to our customers while managing costs tightly. We believe this approach is proving even more prudent given the current economic conditions.”