Gap Inc. Lowers Full-Year Sales Outlook Due to Old Navy's Q2 Performance
Gap Inc. has revised its full-year net sales growth forecast downward following a weaker-than-expected performance from Old Navy, the company’s largest brand in terms of revenue. The new guidance calls for 1% to 1.5% year-over-year sales growth, down from an earlier range of 1% to 2%. This adjustment follows second-quarter results where Old Navy's net sales dropped by 4%, with comparable store sales declining similarly. Despite the drag on revenue from Old Navy’s struggles, other Gap brands like The Gap and Banana Republic showed stronger performance. Meanwhile, earnings per share for the quarter exceeded expectations due to higher-than-anticipated adjusted diluted EPS of $0.52 compared to analyst forecasts of $0.48. In response to ongoing challenges at Old Navy, Gap has appointed Michael Francis as its new president and CEO effective November 2. This marks the second consecutive quarterly revision in sales targets for Gap due to underperformance by Old Navy.
Tickers: $GAP
Topics: brand strategy retail sales performance