Gap is reporting stronger than expected fourth quarter results as sales continue to improve for Old Navy, its largest brand.

The clothing retailer earned net income of $US319 million ($A409.34 million), or 75 cents per share, on $US4.71 billion in revenue.

Analysts expected a profit of 74 cents per share on $US4.7 billion in revenue, according to Zacks Investment Research.

A year earlier the retailer earned $US307 million, or 68 cents per share, on $US4.58 billion in revenue.

The company said sales at Old Navy stores open at least a year grew five per cent for the year, including growth of 11 per cent in the fourth quarter.

Sales at locations open at least a year are considered important measurements of retailer health because they strip out results from stores that recently opened or closed.

Gap had reported strong sales in November and December, particularly for Old Navy.

This month the company said its sales slipped in January but it still raised its forecasts. Gap’s fiscal fourth quarter ended on January 31.

Gap expects a profit of $2.75 to $2.80 per share in the current fiscal year.

Based on current exchange rates the company said the dollar will reduce its net income by 16 cents per share, and it will take a hit of 13 cents per share from a labour dispute that led to a slowdown in unloading cargo on West Coast.

AP