Comparable sales at Gap’s international stores, which includes its UK shops, fell by 6% in the third quarter to October 31, but overall profits at the US chain rose by 25%.
Total international sales rose from $369 million (£223.1m) last year to $378 (£228.6m).
Group sales were up 1% to $3.59 billion (£2.17bn). Profits were boosted by a strong performance at Old Navy, where sales rose 10% against an 18% fall for the same period last year.
Third quarter gross margin increased 380 basis points to 42.5%.
Gap chairman and chief executive Glenn Murphy said: “We are pleased with our third quarter results, particularly our ability to deliver earnings 25%above last year and our highest third-quarter operating margin in a decade.”
“Looking ahead to the holiday season we’re focussed on gaining market share as we invest in marketing and present a strong value proposition to customers across our brands.”
Gap said that following the results its board has authorised a new $500m (£302.3m) share repurchase programme.
The retailer has also announced that it will collaborate for a second time with British designer Stella McCartney on a collection for its babyGap and GapKids stores in US and Canada, the UK, France and Ireland, and Japan, as well as online in the US.