Gap reported revenue that beat market expectations on Thursday as same-store sales rose 5 percent. The retailer also raised its quarterly dividend to 20 cents from 15 cents a share.
Gap, which is based in San Francisco, owns Banana Republic, Old Navy, Piperlime, Athleta and Intermix stores, in addition to its namesake chain. Since early last year, it has been invigorating sales with more brightly-colored clothing, designer collaborations and livelier stores.
After the announcement, the company's shares climbed more than 2 percent in extended-hours trading. (Click here to get the latest quote.)
Earnings excluding items rose to 64 cents per share in the second quarter from 49 cents a share in the year-earlier period.
Revenue increased 8.1 percent to $3.87 billion from $3.58 billion a year ago.
Analysts had expected Gap to report earnings excluding items of 64 cents a share on $3.83 billion in revenue, according to a consensus estimate from Thomson Reuters.
Same-store sales rose 5 percent from a year earlier period.
The retailer also raised its full-year earnings guidance to $2.57 to $2.65 a share, from $2.52 to $2.60 a share.
Last October, the company also announced a management overhaul to help it respond more quickly to shifting tastes around the world.
The change put the North American, international, online, outlet and franchise divisions under a single global executive for each of the company's brands. The company also formed a new innovation and digital strategy team.
Gap reported earlier this month, sales at stores open at least a year was up 5 percent for the three months ended Aug. 3. Gains at Gap and Old Navy offset a decline at Banana Republic.