Executive Summary

• Gap reported 1Q17 EPS of $0.36, up from $0.32 in the year-ago quarter and above the $0.29 consensus estimate. Foreign currency negatively impacted EPS by an estimated $0.03, or about 9%. Total revenues were $3.44 billion, roughly flat year over year.
• Total comps were up 2% from the year-ago quarter. Old Navy comps were up 8% year over year, while Gap comps were down 4% and Banana Republic comps were down 4%. Inventory was about flat year over year at the end of the quarter.
• The company reaffirmed its FY17 EPS guidance of $1.95–$2.05. The company also raised its EPS guidance for 1H17; it now expects a mid-single-digit decline in the first half versus a high-single-digit decline previously.