GAP Cuts it Way to Increased Profit

Lower sales but higher profits at GAP (NYSE:GPS)

Gap said Thursday that its third-quarter profit rose 3.4 percent as cost-cutting efforts offset a sales slump. The retailer said the tough times would last at least another six months. It earned $246 million, or 35 cents a share, in the three months ended Nov. 1, compared with $238 million, or 30 cents a share, in the same period a year earlier. Sales dropped 7.6 percent to $3.56 billion from $3.85 billion a year ago.

Gap said sales at stores opened at least a year, dropped 12 percent in the quarter, compared with a 5 percent drop previously.

Gap joins Wal-Mart (NYSE:WMT) as the only major retailers so far that have increased earnings this quarter..