NEW YORK (CNN/Money) -
Gap Inc. reported first-quarter earnings Thursday that were sharply lower than a year ago, though the struggling apparel retailer's results beat Wall Street expectations.
The San Francisco-based company reported earnings in the quarter ending May 4, 2002, of $36.7 million, or 4 cents a share, compared with $115.5 million, or 13 cents a share, a year ago. Wall Street analysts surveyed by earnings tracker First Call expected, on average, Gap to earn 2 cents a share.
Gap's total sales fell 9 percent to $2.9 billion in the quarter, compared with $3.2 billion a year ago. Sales in stores open for a year or more fell 17 percent in the quarter. The company's monthly comparable-store sales have fallen for 25 straight months.
Sales fell in all of Gap's major lines, including a 20-percent drop at U.S. Gap stores, a 19 percent drop at Gap international stores, and an 18 percent decline at Old Navy stores.
"Our results haven't yet caught up with our efforts, but we're confident that Gap, Old Navy and Banana Republic are moving in the right direction," Gap CEO Millard Drexler said in a statement.
Gap (GPS: Research, Estimates) shares rose 7 cents Thursday to close at $16.89, about half their 52-week high of $34.98.
Gap has struggled to come up with clothing to keep its core customers, while discount chains such as Target Corp. (TGT: Research, Estimates) and Wal-Mart Stores Inc. (WMT: Research, Estimates) have diverted sales during an economic downturn. Gap's earnings in the quarter were somewhat of a surprise, though the company had already alerted investors that it would post a profit, due in part to recent cost-cutting efforts.
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