May 30 (Reuters) - Gap raised its annual sales

forecast and its first-quarter results beat market expectations,

boosted by strength in its Old Navy and Gap brands as

budget-strained Americans snap up its trendy denim bottoms and

active wear apparel.

The Banana Republic owner saw strong spring shopping,

similar to mall-based retailers like Abercrombie & Fitch ( ANF )

, which had also hiked its annual sales goal.

Gap's quarterly store sales jumped 3% from a year ago as it

has been expanding its store presence, while online sales rose

5% to account for 38% of the total sales.

Gap also lifted its fiscal 2024 margin forecast to at least

150 basis points growth compared with a prior target of as much

as 50 bps expansion.

It now sees annual sales to be up slightly from last year

and compared with prior expectations of roughly flat sales.

First-quarter gross margin jumped 410 basis points to 41.2%.

Analysts had expected margin of 38.54%.

It's net sales rose 3% to $3.4 billion, edging past

analysts' average estimate of a 0.3% rise to $3.29

billion. Comparable sales rose 3% from a year ago and compared

with expectations of 0.9%, according to LSEG data.

Peer American Eagle Outfitters ( AEO ) had on Wednesday

missed quarterly revenue estimates as sticky inflation hurt

demand for its clothing and accessories.

(Reporting by Savyata Mishra in Bengaluru; Editing by Arun

Koyyur)