Gap Profits Rise 25%

Sales up 8 percent.

Gap flagship in Shanghai.

Gap Inc. reported today that second quarter net earnings rose 25 percent to $303 million from $243 million.

Sales were up 8 percent to $3.87 billion compared with $3.58 billion in the second quarter a year ago.

The strong growth was a standout in a retail results reporting season where most companies are missing analysts’ estimates and revising their forecasts downward.

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Second quarter diluted earnings per share increased 31 percent to 64 cents compared with 49 cents last year. The retailer raised its estimate for 2013 diluted earnings per share to be in the range of $2.57 to $2.65, from from $2.52 to $2.60.

Gap said it would increase its annual dividend from 60 cents to 80 cents beginning in the third quarter of 2013. “We delivered strength in both our top and bottom lines this quarter,” said Glenn Murphy, chairman and chief executive officer of Gap Inc. “As we move into the second half of the year, we remain focused on growing revenue and driving continued momentum across our portfolio of brands.”

Comparable sales rose 5 percent in the quarter ended Aug. 3.