Old Navy's sales rise, lifting Gap's 3Q profit up 25% to best results this decade

Sales of kid's clothing and jeans helped a slimmer Gap (GPS) deliver its best third-quarter results in this decade. Now, management says it's going after market share, even in this tough market.

The parent of The Gap, Old Navy and Banana Republic posted net income of $307 million, up 25% over a year ago with the 44 cents per share in earnings hitting analysts' target for the period. Executives said the company reaped its best third-quarter operating profit in 10 years by increasing its profit margins through tweaking its merchandise mix and controlling costs.