Gap Appoints New CEO for Old Navy to Address Sales Decline
The Gap Inc. (NYSE:GAP) has appointed Michael Francis as the new president and CEO of its Old Navy brand, effective November 2, replacing Haio Barbeito who will transition into an advisory role. The move follows disappointing second-quarter results for Old Navy, where net sales dropped by 4% year-over-year to $2.1 billion with comparable sales down more than expected at -4%. This marks the first negative comp in a dozen quarters and highlights concerns about the brand's performance, which accounts for nearly 60% of Gap’s total revenue. Despite Old Navy's struggles, overall profitability improved significantly: operating income doubled to $676 million from $292 million year-over-year, while net income more than doubled. The company attributed part of the sales miss to ineffective summer marketing but noted recent improvements in traffic and sales at Old Navy stores. Gap’s namesake brand saw 10% comparable sales growth during the same period, contributing positively to investor sentiment as shares rose by up to 14%. However, analysts remain skeptical about management's explanation for the decline.
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Topics: Leadership Change Retail Sales Performance Stock Movement