Gap Comps Drop 13% in March

Gap Inc. net sales were $1.35 billion for the month of March, 2006, which represents a 9% decrease compared with net sales of $1.47 billion for the same period ended April 2, 2005. The company's comparable store sales for March 2006 decreased 13% compared with a 4% decrease in March 2005.

Comparable store sales by division for March 2006 were as follows:

     --  Gap North America:  negative 13 percent versus negative 1 percent
         last year

     --  Banana Republic North America:  negative 7 percent versus negative
         1 percent last year

     --  Old Navy North America:  negative 15 percent versus negative
         9 percent last year

     --  Gap International:  negative 16 percent versus positive 1 percent
         last year

“Our March performance reflects the challenges we face to increase the frequency of customer visits to our stores,” said Sabrina Simmons, Senior Vice President, Treasury and Investor Relations. “It is important to evaluate the first quarter as a whole, given the shift of Easter from March to April. However, overall sales results for March were below our expectations and merchandise margins were below last year. Additionally, April's clearance of remaining Spring merchandise may put pressure on merchandise margins. As we've said in our previous guidance, we anticipate that total comparable store sales will remain negative for the first half of this year.”

Year-to-date net sales of $2.21 billion for the nine weeks ended April 1, 2006, decreased 8 percent compared with net sales of $2.40 billion for the same period ended April 2, 2005. The company's year-to-date comparable store sales decreased 12 percent, compared with a 4 percent decrease in the prior year.

As of April 1, 2006, Gap Inc. operated 3,061 store locations compared with 3,005 store locations last year.