Gap Names New Old Navy CEO as Sales Slip and Profit Outlook Improves

On August 27, Gap Inc. announced that Michael Francis will become chief executive of its Old Navy banner on November 2, succeeding Haio Barbeito, who will move into an advisory role. The change was disclosed alongside the company’s fiscal second-quarter results, which showed a 4 % year-over-year decline in Old Navy net sales to $2.1 billion and a 4 % drop in comparable sales. Gap raised its adjusted earnings-per-share forecast to $2.35-$2.45 and reported adjusted profit of 52 cents per share, beating expectations. Shares surged in extended trading, though reported gains vary by outlet.

CNBC

Old Navy contributes roughly 60 % of Gap’s total revenue and has been a key growth engine since its launch. The brand posted its first negative same-store sales figure since Q2 2023, attributed to an “unanticipated slowdown in traffic” and a weak summer assortment. Gap’s other banners performed better: Gap brand posted a 10 % comparable-sales increase, Banana Republic rose 3 %, while Athleta fell 12 %.

Reuters

• Old Navy Q2 net sales: $2.1 billion (-4 % YoY).

RetailDive

• Old Navy comparable sales: -4 % (first decline since mid-2023).

CNBC

• Gap brand comparable sales: +10 %.

Gap Shares Jump 12% After Old Navy CEO Change

• Banana Republic comparable sales: +3 %.

CNBC

• Athleta comparable sales: -12 %.

CNBC

• Overall Gap Inc. net sales for the quarter ended August 1: $3.65 billion (-2 % YoY).

CNBC

• Adjusted earnings per share: 52 cents (beat 48-cent estimate).

Reuters

• Revised full-year sales growth outlook: 1 %-1.5 % (down from 1 %-2 %).

Reuters

He added that the company’s “playbook” remains disciplined and that the brand’s recent marketing shortfalls are being addressed with targeted actions. Michael Francis, in his introductory statement, pledged to “lead this incredible team” and to focus on “next-chapter growth” for Old Navy.

Bloomberg

• “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

• “What we did not anticipate was the degree to which our marketing would fall short in driving traffic,” — Richard Dickson, Gap CEO

Bloomberg

• “This leadership change is about execution, not reinvention,” — Richard Dickson, Gap CEO

Gap Shares Jump 12% After Old Navy CEO Change

Media outlets reported differing magnitudes of the post-announcement share surge:

Bloomberg

• CNBC: 12 % jump in extended trading.

CNBC

• Reuters: 15 % rise.

Reuters

• Bloomberg: 17 % increase in pre-market trading.

Bloomberg

• The Globe and Mail: 16 % surge.

Reuters

Old Navy’s leadership transition will take effect on November 2. Gap’s upcoming earnings calls will likely address the brand’s fall-season performance and the impact of tariff refunds expected in the current quarter. Investors will watch whether the targeted actions cited by Dickson translate into improved comparable sales for Old Navy in the holiday period.

Reuters