Gap December sales metric rises 5 pct, tops St.

Associated Press

SAN FRANCISCO (AP) -- Gap Inc. said Thursday that its December revenue at stores open at least a year increased 5 percent, with a big sales jump at its North American Old Navy stores.

The increase beat Wall Street's prediction for a 3.5 percent gain, and shares rose more than 4 percent in premarket trading.

The metric is a key measure of a retailer's health, because it excludes revenue at stores that recently opened or closed.

Gap also on Thursday said that it was adding a luxury division to its brand line-up with the purchase of women's clothing boutique Intermix. Gap bought the chain for $130 million on Monday. Intermix runs 32 stores in the U.S. and Canada and a website.

For the five week period ended Dec. 31, North American Gap revenue at stores open at least a year rose 2 percent. The metric rose 1 percent at North American Banana Republic and 13 percent at North American Old Navy stores. It fell 6 percent at international stores.

The company, which is based in San Francisco, said promotions helped sales during the holiday season, a critical period for retailers.

Total sales increased 5 percent to $20.8 billion in December.

Gap, whose other brands include Piperlime and Athleta, has about 3,000 company-operated stores and about 300 franchise stores in 90 countries.

Gap also said Thursday that its board approved $1 billion for the company to buy back its stock, replacing a completed program of the same amount.

Gap shares rose $1.36, or 4.3 percent, to $32.69 in premarket trading.