Gap last week reported net sales of $1.14 billion for the four-week period ended October 31, 2009, which is an increase of 5 percent as compared with net sales of $1.08 billion for the same period ended November 1, 2008. The company’s comparable store sales for October 2009 also increased 4 percent compared with a 16 percent decrease for October 2008.

“We’re pleased that we grew sales in October while delivering merchandise margins significantly above last year,” said Sabrina Simmons, chief financial officer of Gap Inc. “For the third quarter, we expect to deliver diluted earnings per share about 20 percent above last year.”

Comparable store sales for October 2009 forGap North America were negative 6 percent versus negative 14 percent last year and international negative 4 percent versus negative 5 percent last year.

The company expects diluted earnings per share for the third quarter of fiscal year 2009 to be $0.42 to $0.44 compared with $0.35 for the third quarter last year. This exceeds the current First Call estimate of $0.38.

Given the magnitude of the sales trend improvement, the company now expects operating expense for the third quarter of 2009 to be higher than its previous guidance range of flat to up about $20 million.

For the thirteen weeks ended October 31, 2009, total company net sales were $3.59 billion, which is an increase of 1 percent as compared with net sales of $3.56 billion for the thirteen weeks ended November 1, 2008. The company’s third quarter comparable store sales were flat compared with a decrease of 12 percent in the third quarter of the prior year.

Gap Inc. will release its third quarter earnings via press release on November 19, 2009. The company will report November sales on December 3, 2009.