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Katrina O'Connell

The Gap, Inc. (GPS) February Sales Pre-Recorded Conference March 7, 2013 ET

Katrina O'Connell

Good afternoon. This is Katrina O'Connell, Vice President of Investor Relations with the Gap Inc.'s monthly sales report for February. Our February sales are included in our sales press release issued on March 7, 2013, which is available on www.gapinc.com. [Operator Instructions]

Regarding February sales performance, total company net sales were $966 million for the 4-week period ended March 2, 2013, up 11% to last year. Total company comparable store sales increased 3% to last year. The 8 percentage point difference between the comp growth and the total sales growth was driven largely by the calendar shift, as February 2013 drops off a lower volume week and picks up a higher volume week versus last year. Additionally, intermix is included in total sales and does not have a last year comparison.

Global comps for February were as follows: Gap Inc., positive 3% versus positive 4% last year; Gap brand Global, positive 2% versus negative 2% last year; Banana Republic Global, negative 5% versus positive 11% last year; Old Navy Global, positive 6% versus positive 5% last year. The fiscal year 2012 and fiscal year 2011 historical comparable store sales in this new global structure format can be accessed at www.gapinc.com.

Overall, we're pleased with the month. With regard to comp levers, the positive 3% Gap Inc. comp was driven by strength in conversion and UPT. Comps in February were strongest in week 4 and weakest in week 1, which coincided with the Northeast storms.

Turning to global brand results for the month. At Gap brand, we're pleased with the positive 2% comp in February. We saw continued strength in denim and wovens, and our Presidents' Day weekend promotion was successful. At Banana Republic, the colder weather impacted February performance, as we believe the customer felt like the February assortment was too spring forward. That said, BR was up against a strong positive '11 comp from last year. At Old Navy, we're pleased with the positive 6% comp we delivered in February. Women's continued its strong performance particularly in wovens and denim, as our denim event performed well. As we look forward to March, it's important to note that Easter is on March 31 this year versus April 8 last year. We expected the earlier Easter timing to negatively impact March as Easter Sunday when there's far less shopping activity falls into March versus April last year.

As a reminder, as we enter fiscal 2013, as noted last week in our earnings press release, the 53rd week in fiscal year 2012 creates a timing shift in the calendar for fiscal year 2013. In fiscal year 2013, the first quarter drops off a week from January and picks up a week from May versus last year. This stands to reason the week we add to the first quarter this year is likely to be more meaningful than the week we drop off, similar to the dynamics in February. March sales results will be announced on Thursday, April 11 after market close. Thank you.

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Source: The Gap's Management Hosts February Sales Pre-Recorded Conference (Transcript)
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