Gap, also known as GPS on the Wall Street has beaten analyst forecasts for the second-quarter earnings. This has been possible because of the boost that it has received from its chain known as the Old Navy.

But this high in the earnings may be making for a fall since the inventory levels are already touching high and there is no possibility of them coming down in the near future.

The apparel and luxury brand has seen good days because of its high sales in the denim market. Also recovery of sales through Wal-Mart has done their kind of push.

During the quarter, the retailer was able to earn $234 million or 36 cents per share. This is higher than the $228 million or 33 cents that it saw during the same period last year.

The revenues went up to $3.32 billion as against $3.24 billion. But during the same time, the same store sales went down by 4 per cent. In Old Navy and Banana Republics, however, the sales surged by 2 per cent and 3 per cent respectively.

The profit and the revenue are both higher than the analyst forecast of 35 cents or $3.31 billion.