<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
----------------------------------------------
Date of Report
(Date of earliest event reported)
May 11, 2000
THE GAP, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 1-7562 94-1697231
- ------------------------ ------------------------ ---------------------------------
(State of incorporation) (Commission File Number) (IRS Employer Identification No.)
</TABLE>
One Harrison
San Francisco, California 94105
- ---------------------------------------- ----------------
(Address of principal executive offices) (Zip Code)
(415) 427-2000
-------------------------------
(Registrant's telephone number,
including area code)
N/A
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events.
In connection with the registrant's Registration Statement (Form S-3),
Registration No. 333-70991, the registrant is filing herewith the documents
listed in Item 7 below and such documents are incorporated by reference into
such Registration Statement.
Item 7. Exhibits
12.1 Statement Setting Forth Computation of Ratio of Earnings to Fixed
Charges
99 Press Release dated May 11, 2000
1
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE GAP, INC.
(Registrant)
Date: May 15, 2000 By: /s/ Heidi Kunz
---------------------------------
Heidi Kunz
Executive Vice President and
Chief Financial Officer
2
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
- -------------- -----------
12.1 Statement Setting Forth Computation of Ratio of Earnings to
Fixed Charges
99 Press Release dated May 11, 2000
3
<PAGE>
Exhibit 12.1
Computation of Ratio of Earnings to Fixed Charges
<TABLE>
<CAPTION>
--------------------------
Thirteen Weeks Ended
--------------------------------------------------------------------- --------------------------
Feb 3, 1996 Feb 1, 1997 Jan. 31, 1998 Jan. 30, 1999 Jan. 29, 2000 Apr 29, 2000 May 01, 1999
--------------------------------------------------------------------- --------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings Before Income Taxes 585,199 748,527 854,242 1,319,262 1,784,949 370,829 323,792
Add:
Interest Expense 5,490 5,529 17,779 46,145 44,968 11,503 7,963
Interest on rental expense 195,168 218,403 250,025 288,143 337,471 86,855 74,387
-------------------------------------------------------------------- --------------------------
Earnings 785,857 972,459 1,122,046 1,653,550 2,167,388 469,187 406,142
==================================================================== ==========================
Interest Expense 5,490 5,529 17,779 46,145 44,968 11,503 7,963
Capitalized Interest - 8,564 12,186 10,982 24,900 8,330 4,328
Interest on rental expense 195,168 218,403 250,025 288,143 337,471 86,855 74,387
-------------------------------------------------------------------- --------------------------
Fixed Charges 200,658 232,496 279,990 345,270 407,339 106,688 86,678
==================================================================== ==========================
Ratio of Earnings to Fixed Charges 3.92 4.18 4.01 4.79 5.32 4.40 4.69
</TABLE>
<PAGE>
Exhibit 99
GAP INC. REPORTS STRONG FIRST QUARTER EARNINGS GROWTH; EARNINGS PER SHARE UP 23
PERCENT ON SALES GAIN OF 20 PERCENT
SAN FRANCISCO, CA, - May 11, 2000 - Gap Inc. (NYSE-GPS) today announced record
sales and earnings for the first quarter which ended Apr. 29, 2000. Earnings per
share during the quarter rose 23 percent to $0.27 versus $0.22 the prior year.
First quarter net sales rose 20 percent to $2.7 billion, compared with $2.3
billion in 1999. Comparable store sales decreased 2 percent versus an 11 percent
increase last year.
During the first quarter, the company's comparable store sales by division were
as follows:
. Gap Domestic turned in a negative mid-single digit versus a positive
mid-single digit last year
. Gap International had a positive mid-single digit versus positive high-
twenties last year
. Banana Republic had a positive mid-single digit versus positive low-
teens last year
. Old Navy turned in a negative low-single digit versus positive low-
twenties last year.
Total first quarter sales growth has averaged 30 percent during the past three
years; comparable store sales increases have averaged 9 percent.
Net earnings increased 16 percent in the first quarter to $235 million compared
with $202 million last year. After-tax return on sales was 8.6 percent, down 30
basis points from last year.
Millard S. Drexler, president and chief executive officer, said, "We had a
strong quarter. Despite a slow Easter, we posted record results, with earnings
per share up 23 percent in the first quarter over a 47 percent increase last
year. Gap, Banana Republic and Old Navy all had positive earnings growth. These
results show the strength of our brands and our management team in driving long-
term growth."
Store count and square footage at quarter end for 2000 and 1999 were as follows:
<PAGE>
April 29, 2000 May 1, 1999
- --------------------------------------------------------------------------
Number of Sq. Ft. Number of Sq. Ft.
Stores (millions) Stores (millions)
- --------------------------------------------------------------------------
Gap Domestic 1,812 10.6 1,533 9.1
- --------------------------------------------------------------------------
Gap International 433 2.4 326 1.6
- --------------------------------------------------------------------------
Banana Republic 354 2.7 295 2.1
- --------------------------------------------------------------------------
Old Navy 546 9.8 420 6.7
- --------------------------------------------------------------------------
Total 3,145 25.5 2,574 19.5
- --------------------------------------------------------------------------
Increase 22% 31% 16% 22%
Webcast and Conference Call Information
Heidi Kunz, executive vice president and chief financial officer, will host a
summary of Gap Inc.'s first quarter results in a live conference call and real-
time webcast, which is accessible via www.gapinc.com. The webcast is located in
the Performance Section under Sales and Earnings and will begin at 8:30 a.m.
Eastern Time today. All interested parties may also attend via the conference
call at 800-374-0168. For international users, please dial 706-634-0994. Replay
will be made available on www.gapinc.com and 1-800-GAP NEWS for two weeks after
this announcement.
Copyright Information
The conference call and webcast will be simultaneously recorded on behalf of Gap
Inc. and consist of copyrighted material. They may not be re-recorded,
reproduced, retransmitted or rebroadcast without Gap Inc.'s express written
permission. Your participation represents your consent to these terms and
conditions, which are governed under California Law. Your participation on the
call also constitutes your consent to having any comments or statements you make
appear on any transcript or broadcast of this call.
Forward-Looking Statements
The information made available in this press release contains certain forward-
looking statements that reflect Gap Inc.'s current view of future events and
financial performance.
Wherever used, the words "expect," "plan," "anticipate," "believe" and similar
expressions identify forward-looking statements.
Any such forward-looking statements are subject to risks and uncertainties and
the company's future results of operations could differ materially from
historical results or current expectations. Some of these risks include, without
limitation, ongoing competitive pressures in the apparel industry, risks
associated with challenging international retail environments, changes in the
level of consumer spending or preferences in apparel, trade restrictions and
political or financial instability in countries where the company's goods are
manufactured, disruption to operations from Year 2000 issues and/or other
factors that may be described in the company's annual report on Form 10-K and/or
other filings with the Securities and Exchange Commission. Future economic and
industry trends that could potentially impact revenues and profitability are
difficult to predict.
<PAGE>
Attachment A Gap Unaudited
Inc. Condensed
Consolidated
Balance Sheets
- ------------------------------------------------
($000) April 29, May 1,
2000 1999
- ------------------------------------------------
ASSETS
Current Assets
Cash and
equivalents $ 436,172 $ 456,107
Merchandise
inventory 1,652,049 1,198,497
Prepaid
expenses and
other current
assets 315,709 263,927
- -------------------------------------------------
Total Current
Assets 2,403,930 1,918,531
Property and
equipment, net 2,905,064 1,997,900
Lease rights and
other assets 348,597 211,441
- -------------------------------------------------
Total Assets $5,657,591 $4,127,872
=================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
- -----------------------------------------------------------------------
($000) April 29, May 1,
2000 1999
- -----------------------------------------------------------------------
Current Liabilities
Notes payable $ 631,461 $ 97,834
Accounts payable and accrued
expenses 1,374,920 1,284,520
Deferred lease credits and other
current liabilities 22,656 15,185
- -----------------------------------------------------------------------
Total Current Liabilities 2,029,037 1,397,539
Long-Term Liabilities
Long-term debt 769,287 545,045
Deferred lease credits and other
liabilities 431,473 347,517
- -----------------------------------------------------------------------
Total Long-Term Liabilities 1,200,760 892,562
Shareholders' Equity 2,427,794 1,837,771
- -----------------------------------------------------------------------
Total Liabilities and Shareholders' Equity $5,657,591 $4,127,872
=======================================================================
<PAGE>
Attachment B Gap Unaudited
Inc. Condensed
Consolidated
Statements
of Earnings
- -------------------------------------------------------------------------
($000 April 29, Percentage May 1, Percentage
except per 2000 to Sales 1999 to Sales
share
amounts)
- -------------------------------------------------------------------------
Net sales $ 2,731,990 100.0 $ 2,277,734 100.0
- -------------------------------------------------------------------------
Costs and Expenses
Cost of
goods sold
and
occupancy
expenses 1,601,905 58.6 1,334,155 58.6
Operating
expenses 750,303 27.5 615,149 27.0
Net
interest
expense 8,953 0.3 4,638 0.2
- -------------------------------------------------------------------------
Earnings
before
income
taxes 370,829 13.6 323,792 14.2
Income
taxes 135,353 5.0 121,422 5.3
- -------------------------------------------------------------------------
Net
Earnings $ 235,476 8.6 $ 202,370 8.9
- -------------------------------------------------------------------------
Weighted
average
number of
shares -
basic 850,325,670 854,464,568
Weighted
average
number of
shares -
diluted 888,020,166 900,043,739
- -------------------------------------------------------------------------
Earnings
per share -
basic $ 0.28 $ 0.24
Earnings
per share -
diluted $ 0.27 $ 0.22
- -------------------------------------------------------------------------
Number of
stores
open at
end of
period 3,145 2,574
Total
square
footage at
end of
period 25,519,300 19,517,136
=========================================================================
