The company, which owns Gap, Banana Republic and Old Navy, said sales in Gap stores open at least one year increased 1% in January, while analysts expected a decline of 1.3%, according to Thomson Reuters. By that same measurement, Old Navy store sales rose 4%, while Banana Republic sales dropped 10%.
Gap said it expects earnings per share of 65 cents to 66 cents for the fourth quarter, surpassing analysts' expectations of 60 cents.
The company reported net sales of $899 million in January, down from $1.13 billion sales in the same five-week period last year; January 2014 and the latest fourth quarter had one less week than last year's based on the calendar that retailers used. Net sales for the fourth quarter were $4.58 billion compared to $4.73 billion a year earlier.
"We're pleased to deliver a strong finish to the year, with another month and quarter of comp sales growth," said Chairman and CEO Glenn Murphy in the company's statement.
TheStreet Ratings team rates GAP INC as a "buy" with a ratings score of B+. TheStreet Ratings Team has this to say about its recommendation:
"We rate GAP INC (GPS) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, increase in stock price during the past year and growth in earnings per share. We feel these strengths outweigh the fact that the company shows weak operating cash flow."