Corporate Credit Rating: A/Negative/A-1 Standard & Poor's said today that The Gap Inc.'s reported third-quarter 2000 net income decline of 41%, compared with the previous year, has no impact on the company's credit rating or outlook. The decline was primarily due to same-store sales declines in each of its four divisions, and lower merchandise margins, particularly in the Gap and Old Navy stores. Standard & Poor's had expected a significant decline in earnings, but the actual decline was greater than expected. Nonetheless, credit protection measures and overall financial strength remain within the parameters for the current rating. Further weakness is expected in the fourth quarter, but should not be significant enough to affect the company's credit rating.
