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Gap Q1 net sales decline, reaffirms earnings guidance

By Prachi Singh

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Gap reported first quarter fiscal year 2015 net income was 239 million dollars or 0.56 dollars per share on a diluted basis. The company also reaffirmed its full year earnings per share guidance to be in the range of 2.75 dollars to 2.80 dollars. Gap’s net sales decreased 3 percent to 3.66 billion dollars compared with 3.77 billion dollars for the first quarter last year. On a constant currency basis, net sales decreased 1 percent compared with last year. Comparable sales for the first quarter were down 4 percent versus negative 1 percent last year.

“With our leadership team in place, we are making the changes necessary to improve our long-term performance, starting with an intense focus on greater product acceptance,” said Art Peck, Chief Executive Officer, Gap.

During the first quarter, Old Navy delivered positive 3 percent comparable sales results, on top of three consecutive years of growth, as customers responded favorably to the brand’s product assortments and marketing campaigns. During the quarter Gap distributed 329 million dollars to shareholders through share repurchases and dividends.

Comparable sales at Gap Global were negative 10 percent versus negative 5 percent last year, at Banana Republic Global, negative 8 percent versus negative 1 percent last year and at Old Navy Global, positive 3 percent versus positive 1 percent last year. First quarter diluted earnings per share were 0.56 dollars compared with diluted earnings per share of 0.58 dollars in the first quarter of fiscal year 2014. The company continues to expect operating margin to be down about 1 percentage point in fiscal year 2015 compared with fiscal year 2014.

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