Gap’s 1st-Quarter Earnings Rise 61%

Gap Inc. said fiscal first-quarter earnings rose a better-than-expected 61% as the retailer’s advertising campaigns boosted sales of spring fashions such as jeans, khakis and T-shirts. Net income rose to $136.1 million, or 34 cents a diluted share, from $84.3 million, or 20 cents, in the year-ago quarter. San Francisco-based Gap was expected to earn 31 cents. Gap’s revenue surged 40% to $1.72 billion as it sold more items at full price. Last year, it had to mark down prices as men shunned the too-trendy fashions at its mainstay Gap stores. Chief Executive Millard Drexler has refocused Gap on basics such as khakis and promoted the lower-cost clothes at its fast-growing Old Navy chain. Gap shares fell 38 cents to close at $54 on the New York Stock Exchange.