NEW YORK -- Gap reported a 61 percent increase in fourth-quarter profits, capping a strong year that saw the company's turnaround take hold.
Separately, the San Francisco-based company, which operates stores under its namesake, Banana Republic and Old Navy brands, said that it's raising its annual dividend to 60 cents from 50 cents for the current year. The company offered a muted profit outlook, so shares were up slightly in after-market trading.
Nevertheless, the company's latest performance, which include the critical holiday period, shows how the company's efforts to push brightly colored fashions, new designer collaborations and enliven its stores are helping to invigorate sales after struggling for years to reclaim its fashion status.
"Our results in 2012 were stellar in many ways, and I'm very pleased with how well our product resonated with customers," said Glenn Murphy, chairman and chief executive of Gap, in a statement.
Gap said late Thursday that it earned $351 million, or 73 cents per share, in the quarter ended Feb. 2. That compares with $218 million, or 44 cents per share, a year earlier.
Revenue rose 10 percent to $4.73 billion in the period.
Analysts had expected 71 cents per share on revenue of $4.69 billion, on average.
Revenue at stores opened at least a year rose 5 percent. The measure is considered a key indicator of a retailer's health. By division, the metric at Gap's North America
For the year, net income rose 36 percent to $1.1 billion, up from $833 million. Revenue rose 7.6 percent to $15.6 billion.
Companywide, revenue at stores opened at least a year rose 5 percent, with every division except its international business posting increases.
Gap has worked hard to turn around its business, from staff changes to new ad campaigns and partnerships with other designers. Among some of the standouts were a Gap Kids partnership with Diane Von Furstenberg and Banana Republic's partnership with AMC's hit show "Mad Men."
The company has also hired new talent. The Banana Republic division brought in fashion designer Narciso Rodriguez who began serving as an adviser to the brand starting with the fall 2013 collection.
The Gap brand already had brought back Tracy Gardner as creative adviser. She made an imprint on holiday fashions. Gardner, a former J. Crew executive, worked at Gap and Banana Republic in the late 1990s and early 2000s. Last fall, the San Francisco company hired Stef Larsson, former head of global sales for trendy fashion retailer H&M, as president of the Old Navy brand.
Gap announced last October a management overhaul aimed at enabling it to respond more quickly to changing tastes around the world. The change, which took effect this month, 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 to further advance its efforts in that area.
Gap's first-quarter dividend of 15 per share will be paid on or after May 1 to shareholders of record at the close of business on April 10.
The company expects to earn $2.52 per share to $2.60 per share this year. That's below analysts' estimate of $2.59 estimate, according to FactSet. Gap cited the weakening yen as a factor.
Shares rose 68 cents, or 2.1 percent, to $33.60 during after-hours trading, after climbing 44 cents to close at $32.95. Shares have soared nearly 80 percent since the beginning of last year amid evidence of a turnaround.