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Gap posts surprise comparable sales rise in December

Apparel retailer Gap reported a surprise rise in December comparable sales, helped by strong demand for its Gap and Old Navy brands, a bright spot in the overall retail gloom.

The company's shares rose 7.4 percent to $24.98 in after-market trading on Thursday. The stock had surged as much as 12 percent in late trade.

Gap, 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 previously forecast range of $1.92 per share.

The company's comparable sales for December rose 4 percent, while analysts on average had expected a fall of 0.7 percent.