Last week, the operator of Old Navy, Banana Republic and its namesake Gap stores reported February same-store sales that grew 3% or better than the 2.3% increase pegged by Retail Metrics.
The company noted strength at its Old Navy chain, where strong demand for women's denim and woven tops helped same-store sales jump 6%.
Global same-store sales rose 2% at its Gap chain and fell 5% at its Banana Republic boutiques.
Looking ahead, Gap noted that an early Easter, which falls in March this year, may hurt sales for March.
The retailer has delivered strong results in recent quarters. Its bottom line grew 15% to 66% in the latest four quarters. Sales have improved from single digits in the past three quarters to 10% growth in the latest reporting period.
In late February, the company announced a plan to increase its annual cash dividend by 20% to 60 cents a share. This is its fourth straight annual hike.
Gap has a yield of about 1.6%, which is on the low end of the 21 dividend-paying stocks in the Retail-Apparel/Shoes/Accessories group. But Gap's Composite Rating of 86 is the highest in the group.
Gap has formed a five-month cup base with a 37.95 buy point. On the plus side, the stock has shown strong accumulation in recent weeks. Mutual fund ownership has also risen in recent quarters.
The stock is owned by Fidelity Contrafund -- a leading growth mutual fund.
But Gap is in a third-stage base. Generally first or second-stage structures are preferable.