Shares rose in after-hours trading when the news was announced.
The announcement comes as the San Francisco-based clothing chain said that it posted a 1 percent increase in revenue at stores opened at least a year for the November and December period compared with a year ago. For December, that figure was unchanged from a year ago. Analysts had expected an increase of 1.5 percent for last month, according to Thomson Reuters.
"We delivered solid overall performance across our global brands this holiday season, on top of last year's strong results," said Glenn Murphy, chairman and CEO of Gap Inc., in a statement.
By division, Gap's namesake stores posted a 1 percent increase in December in revenue at stores opened at least a year, while Banana Republic's saw that metric unchanged. Old Navy had a 2 percent drop in the measure.
This figure is a key indicator of a retailer's health because it excludes results from stores recently opened or closed.
Gap said that net sales for the nine-week period ended Jan. 5 were $3.68 billion, up 2 percent from $3.59 billion a year ago.
Gap reaffirmed its full-year earnings-per-share guidance range of $2.57 to $2.65 per share. Analysts expected $2.68 per share. But said it was "comfortable" that it would achieve the high end of that forecast after completing a majority of the holiday season.
Gap's shares rose 1.9 percent, or 73 cents to $40.15 in after-hours trading on Thursday, after closing up 22 cents to $39.42 in regular trading.