Gap Announces Old Navy CEO Transition as Sales Slip in Fiscal Q2

Gap Inc. disclosed that Michael Francis, the chief customer officer since May, will assume the chief executive role for Old Navy later this year, succeeding Haio Barbeito, who will move into an advisory capacity. The shift comes as Old Navy reported net sales of $2.1 billion, a 4% year-over-year decline and the brand’s first negative same-store sales figure since Q2 2023. The slowdown was attributed to an “unanticipated slowdown in traffic” and a summer marketing campaign that “lacked a direct product message.”

CNBC

The announcement coincided with Gap’s fiscal second-quarter earnings release. While the company beat analysts’ earnings-per-share expectations, revenue fell short of forecasts. Gap’s overall comparable sales dipped 1%, with in-store sales down 3%. The Old Navy segment, which contributes roughly 60% of Gap’s total revenue, was the primary source of the shortfall.

CNBC

• Total net sales: $3.65 billion, down from $3.73 billion a year earlier.

CNBC

• Adjusted earnings per share (excluding one-time items such as $512 million in tariff refunds): 52 cents.

CNBC

• Adjusted EPS outlook raised to $2.35-$2.45 for the full year (previously $2.30-$2.40).

CNBC

• Gap’s Gap banner saw comparable sales rise 10% to $844 million; Banana Republic up 3% to $478 million; Athleta down 12% to $264 million.

CNBC

• Gross margin improved 0.2% year over year after accounting for an 11.4-point benefit from tariff-refund recovery.

CNBC

Gap CEO Richard Dickson described the transition as “a planned and thoughtful transition” intended to better equip Old Navy for its next chapter, emphasizing that the company’s strategy remains unchanged. Francis’s statement highlighted a focus on cultural relevance and customer experience.

CNBC

• “We've been working — from fixing fundamentals to building momentum and ultimately looking to accelerate growth, and so there's not a change in strategy,” — Richard Dickson, Gap CEO

CNBC

• “Ultimately, our slight miss on total company was really due to Old Navy's seasonal product assortment,” — Richard Dickson, Gap CEO

CNBC

• “On balance, we're running a very disciplined organization with a playbook that is working,” — Richard Dickson, Gap CEO

CNBC