Gap profits surge 29 percent

Shopper leaving The Gap store in Freeport, Maine. AP Photo/Pat Wellenbach

(CBS/AP) NEW YORK - Gap Inc. (GPS) is reporting a 29 percent increase in second-quarter net income as the fashion retailer's moves to spice up its fashions are attracting shoppers back to its stores.

Gap, which operates stores under its namesake, Old Navy, Banana Republic and Athleta, also said Thursday that it's raising its full-year profit guidance.

The San Francisco-based retailer earned $243 million, or 49 cents per share, for the three months ended July 28. That compares with $189 million, or 35 cents per share, in the year-ago period.

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Revenue rose 6 percent to $3.58 billion. Revenue at stores opened at least a year was up 4 percent.

"Customers responded well to our product offerings across our brands, driving a healthy increase in sales and earnings per share during the quarter," said Gap chief executive Glenn Murphy in a statement. "Our continued focus on product and store execution are helping to drive positive momentum, and we're committed to sustaining solid performance for the remainder of the year."

Analysts expected a profit of 46 cents per share on revenue of $3.57 billion, according to FactSet.

The Gap is also benefiting from a recent hike in consumer spending. Retail sales rose rose 0.8 percent from June to July, the Commerce Department said this week. It was the sharpest increase since February.

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