Three's a Charm

Gap Inc. (San Francisco) reported significant sales and earnings growth for the first quarter of 2003, a positive sign that customers are responding to the retailer's efforts to turn itself around through improved product, marketing and customer service initiatives at its Gap, Old Navy and Banana Republic division stores.

The specialty retailer reported net earnings of $202 million for the three months ended May 3, compared with $36.7 million a year prior. First-quarter sales totaled $3.4 billion, a 16 percent increase over the same period last year, while same-store sales increased 12 percent, compared with a decrease of 17 percent the year prior.

“I am extremely proud of what our teams accomplished in the first quarter as we continue our turnaround, build momentum and more consistently meet and exceed our customers' expectations,” says Gap Inc. president and ceo Paul Pressler. “Strong product assortments with more brand-appropriate styles and color palettes, more effective marketing and improved service in our stores clearly helped us gain traction and deliver quality earnings.”

The results mark the company's third consecutive quarter of earnings growth, and seventh consecutive month of positive same-store sales results.

Of its divisions, Old Navy reported the highest net sales for the quarter at $1.4 billion, versus $1.1 billion last year. Other divisions reported sales of $1.2 billion at Gap U.S.; $412 million at Gap Intl.; and $411 million at Banana Republic.