Gap Inc. Reports Q2 Sales Decline Amid Old Navy Leadership Change
After a streak of ten consecutive quarters with sales growth, Gap Inc. reported a 2 percent decline in second-quarter revenue to $3.65 billion as fashion missteps at its Old Navy brand hurt performance. The company announced leadership changes for the struggling label, naming Michael Francis as president and CEO starting November, succeeding Haio Barbeito who will transition into an advisory role. Despite the sales dip, Gap Inc.'s operating income more than doubled to $676 million from $292 million a year ago. Net income also rose significantly to $501 million or $1.38 per diluted share compared to $216 million and $0.57 in 2024. The company revised its full-year sales forecast downward but raised expectations for earnings per share, which climbed over 11 percent after hours on the positive results. Old Navy's net sales fell by 4 percent year-over-year to $2.1 billion due to poor seasonal product execution in categories like swimwear and dresses. In contrast, Gap brand revenue increased by 9 percent with strong comparable store growth.
Topics: executive change Old Navy retail sales decline