(c) 2013, Bloomberg News.

(c) 2013, Bloomberg News.

Gap Inc., the biggest U.S. specialty-apparel retailer, said second-quarter profit rose 25 percent as new denim and athletic products boosted sales at its namesake and Old Navy chains.

Net income for the quarter ended Aug. 3 rose to $303 million, or 64 cents a share, from $243 million, or 49 cents, a year earlier, the San Francisco-based company said Thursday in a statement. That matched the average of analysts' estimates compiled by Bloomberg. The retailer raised its forecast for its annual profit to as much as $2.65 per share from a previous maximum of $2.60.

Chief Executive Officer Glenn Murphy has worked to improve product selections, drawing customers in with denim lines, new athletic wear offerings and low prices. Net sales for the quarter rose 8.2 percent to $3.87 billion.

"They obviously have had momentum in the business," Anna Andreeva, a New York-based analyst at Oppenheimer & Co., said in an interview before the release. She has the equivalent of a hold rating on the shares. "They've executed well from the product standpoint."

Gap rose 0.3 percent to $42.10 at 4:02 p.m. in New York after closing at $41.99. The shares had gained 38 percent this year through the close of regular trading Wednesday the best performance for an apparel company in the Standard & Poor's 500 Retailing Index.

Sales at stores open at least a year rose 5 percent in the quarter, Gap said. That includes 6 percent gains at both the Gap and Old Navy brands and a 1 percent decline at Banana Republic.

Other retailers are experiencing challenges getting consumers to spend on clothing. Abercrombie & Fitch Co. on Thursday plunged in New York trading after forecasting profit for the current quarter that was less than analysts estimated amid declining traffic at its stores. American Eagle Outfitters Inc. on Wednesday said earnings in its second quarter were hurt by a weak consumer environment and missteps in its women's clothing offerings.

Gap also said today that it would boost its annual dividend to 80 cents a share, from 60 cents, starting in the third quarter.

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