The US fashion giant, which operates Gap, Old Navy and Banana Republic, also announced a US$1 billion (£503.2 million) share buy-back programme.
In the three months to February 2, net profit climbed 21 per cent to US$265 million (£133.3 million) on sales down 5 per cent to US$4.68 billion (£2.35 billion).
Like-for-like sales fell 3 per cent and chief executive Glenn Murphy – seven months into his tenure at the retailer – acknowledged the need to lift sales. He also said the retailer would focus on cost and inventory control this year to improve margins.
Gap’s profit surge was in sharp contrast to a spate of worrying figures from other household US names. Sears reported that fourth-quarter profits slumped 47.5 per cent to US$426 million (£214.4 million) as sales and prices continued to tumble at its Kmart and Sears stores. Same-store sales fell 4.5 per cent and the results marked Sears’ third consecutive quarterly profit decline.
Target reported an 8 per cent drop in net sales to US$1.03 billion (£518.3 million) for the fourth quarter, while department store chain Kohl’s reported fourth-quarter profits down 15 per cent.
Nordstrom reported a fourth-quarter profit decline of 8.7 per cent to US$212 million (£106.7 million), while Macy’s better-than-expected fourth-quarter net profit rise of 2.3 per cent to US$750 million could not gloss over a 2 per cent fall in same-store sales.
Fourth-quarter net profits at DIY giant Home Depot fell 27 per cent to US$671 million (£337.6 million), as it warned of the ongoing impact of the US housing slump.
MHE Retail chairman Edward Whitefield said: “When leading aggressive selling machines like these start producing 1 to 2 per cent like-for-like growth, it is clear there is a US consumer recession. Tax rebates will not feed in until August and September, meaning a very tough six months for retailers, with few exceptions.”