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Gap gets it done in Q4, earnings advance

SAN FRANCISCO -- Delivering its fourth consecutive year of double-digit earnings per share growth, Gap Inc. reported earnings per share for fiscal year 2010 increased 19% to $1.88 on a diluted basis compared with $1.58 on a diluted basis for fiscal year 2009. Net earnings grew by $102 million to $1.2 billion.

For the fourth quarter, which ended January 29, 2011, the company’s net earnings increased 4% to $365 million, or 60 cents per share on a diluted basis, compared with $352 million, or 51 cents per share on a diluted basis, for the same period last year.

Fourth quarter net sales were $4.36 billion compared with $4.24 billion for the fourth quarter of last year. The company’s fourth quarter comparable-store sales were flat compared with an increase of 2%t in the fourth quarter of the prior year. The company’s sales for the direct division for the fourth quarter increased 23% to $404 million compared with $329 million for the fourth quarter of last year.

 “During 2010, we executed well on our goal of delivering sales improvement alongside our fourth consecutive year of double-digit earnings per share growth,” said Glenn Murphy, chairman and chief executive officer of Gap Inc. “We remain committed to investing in the future and executing with speed and consistency, allowing us to capitalize on the enormous global growth potential ahead of us.”

The company said top line growth will continue to be a focus in fiscal year 2011. The company plans to make targeted, long-term growth investments such as the following: continuing to remodel Old Navy stores with the goal of having nearly 400 in the new format by the end of fiscal year 2011; opening about 75 new franchise stores; opening about 50 company-owned stores internationally, including about 10 to 15 stores in China, 8 to 10 stores in Italy, and 25 outlet stores; expanding Athleta in North America, with about 8 to 10 store openings by the end of fiscal year 2011; and continuing to grow online, both internationally and domestically.

Fiscal year 2010 net sales increased 3% to $14.7 billion compared with $14.2 billion last year.

Fiscal year 2010 diluted earnings per share increased 19% to $1.88 compared with $1.58 last year.

The company expects diluted earnings per share to be in the range of $1.88 to $1.93 for fiscal year 2011.

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