Fashion retailer Gap Inc. said Thursday after the markets closed that its second-quarter net income rose 29%, helped by higher sales and improved gross margins. The company’s quarterly earnings per share also came in above analysts’ expectations as did its quarterly sales. Based on second quarter results, the company once again raised its full year earnings outlook.

For the second quarter ended July 28, 2012, the San Francisco-based company reported net income of $243 million or $0.49 per share, compared to $189 million or $0.35 per share for the year-ago quarter. Net sales for the second quarter grew 6 percent to $3.58 billion from $3.39 billion last year. Same-store sales increased 4 percent. Analysts polled by Thomson Reuters estimated earnings of $0.48 per share and revenues of $3.53 billion for the quarter.

Same-store sales for the second increased 4%. Same-store sales rose 7% for Gap stores in North America and Banana Republic’s North America fleet, while it grew 3% for Old Navy’s North America stores. International same-store sales fell 5%. Whilst gross margin for the quarter improved to 39.9% from 36.9% a year earlier.

“Customers responded well to our product offerings across our brands, driving a healthy increase in sales and earnings per share during the quarter,” said Glenn Murphy, chairman and chief executive officer of Gap. “Our continued focus on product and store execution are helping to drive positive momentum and we’re committed to sustaining solid performance for the remainder of the year.”

The company ended the second quarter with a total of 3,285 store locations in 42 countries, 3,035 of which were company-operated. During the second quarter, the company opened 29 and closed 20 company-operated store locations. The company opened its first Old Navy store outside of North America in Tokyo and continued to expand its Gap brand store base in China. The company continues to expect net openings of about 15 company-operated stores and about 50 to 75 franchise stores during fiscal year 2012.

Going forward, the company raised its fiscal year 2012 earnings estimate to a range of $1.95 to $2.00 per share, from prior estimate of $1.78 to $1.83 per share. Analysts currently estimate earnings of $2.08 per share for the full year.

The company repurchased $349 million worth of shares in the second quarter and ended the quarter with 479 million shares outstanding and $2.1 billion in cash, cash equivalents, and short-term investments. Gap shares are currently gaining 1.34% in after hours trading after closing the day’s regular trading session at $34.34, down 27 cents. The shares trade in a 52-week range of $15.08 to $34.92.