Gap Inc. (NYSE:GPS) comparable sales in December surged against the odds

Apparel Retail giant Gap Inc. (NYSE:GPS) posted a surprise surge in December comparable sales, and said it expected 2016 profit to beat the forecast, in sharp comparison to weak holiday sales from department store operators and some apparel retailers.

Company’s stock, which was boosted from robust demand for its Gap Inc. (NYSE:GPS) and Old Navy brands, were up 8% at US$25.14 in after-market trading on Thursday.

In the recent times the company has been in the process of overhauling the Gap and banana republic brands, looking to repeat the success of the low-end Old Navy attire.

Meanwhile comparable sales of its signature Gap brand surged I% in December, in contrast with a 2% drop year over year.

Sales of old Navy brand surged 12%, in contrast with a 7% drop year over year.

The company’s comparable sales increased 4% in December in contrast with the analyst’s prediction of a 0.7% drop.

In the recent periods Gap and other traditional apparel chains have been struggling with the surging status of online retailers and fast-fashion chains such as H&M, Forever 21 and Inditex’s Zara, which are popular for offering up-to-the-minute clothes at much better prices.

Gap (GPS), which is also shutting stores and reducing overhead costs, said it now expected full-year 2016 adjusted profit to be modestly above the higher end of the prediction range of US$1.87-US$1.92 per share.

Furthermore department-store chains Macy’s Inc and Kohl’s Corp both dropped their 2016 profit projections on Wednesday, after their holiday season sales dropped more than estimated.

Moreover American Eagle Outfitters Inc, which said fourth-quarter comparable sales to date were flat, said on Thursday “the holiday sales season was choppy and highly promotional.”