(GPS) - Get Report

backed its 2005 earnings outlook Thursday, issued earnings guidance for 2006 and apprised investors on some of its growth plans at a meeting for investors.

The clothing chain said it's still on track to earn between $1.41 and $1.45 a share this year, and it expects its earnings to increase 12% in 2006. Analysts on Wall Street were forecasting earnings of $1.42 a share for 2005 and $1.60 per share next year, according to consensus estimates reported by Thomson First Call.

The retailer, which doubled its annual dividend this year to 18 cents, said it expects to increase dividends at a rate higher than its growth in net income. It expects to achieve operating margins of about 13% for 2005 and possibly expand them to 14% in 2006.

In terms of store growth, Gap plans to open a net total of 260 stores through 2007, including 200 stores for its Old Navy chain. Gap's total square footage will rise 2% in 2005, 3% in 2006 and 5% in 2007.

It also has plans to launch a new specialty apparel brand targeting women over age 35 with store openings expected in two U.S. markets this fall.

"We believe that the growth initiatives we are outlining today will strengthen Gap Inc.'s position as the leading global apparel specialty retailer -- both in stores and online," said the company's president and chief executive, Paul Pressler, in a statement. "We are committed to delivering long-term shareholder value, through both EPS growth and cash distributions."

Overseas, the company plans to start exploring opportunities in China next year. It plans to open 50 new Gap stores abroad by 2007.

Total capital spending should reach about $625 million in 2005 and increase to $725 million in both 2006 and 2007.

Shares of Gap were recently up 56 cents, or 2.7%, to $21.33.