Gap Inc. announced a leadership change for its Old Navy brand, naming Michael Francis as the new CEO effective November 2. Francis, who previously served as Old Navy's chief customer officer since May, will replace Haio Barbeito, who led the brand since 2022 and will transition to an advisory role. The company aims for this leadership shift to support Old Navy's turnaround efforts amid a recent decline in the brand's sales, which had experienced its first negative comparable sales since mid-2023.

Old Navy's fiscal second-quarter results revealed net sales of $2.1 billion, reflecting a 4% year-over-year decrease, with comparable sales also down 4%, worse than the expected 2.4% drop. CEO Richard Dickson attributed this decline partly to ineffective summer marketing and an unexpected slowdown in customer traffic. However, he noted that recent improvements in traffic and sales have already started to emerge, signaling potential recovery momentum under Francis’s leadership.

Overall, Gap's financial performance was mixed in the second quarter, as the company slightly missed revenue goals but exceeded earnings per share expectations with 52 cents adjusted vs. 48 cents anticipated. The Gap brand itself outperformed expectations with a 10% increase in comparable sales, driven by targeted product storytelling, while Banana Republic posted moderate gains. In contrast, Athleta experienced a significant 12% decline in comparable sales, with efforts continuing to rebuild the brand profitably.

Looking ahead, Gap narrowed its full-year revenue growth forecast to 1%-1.5% due to Old Navy’s lag but increased its adjusted earnings per share guidance to a range of $2.35 to $2.45. The company also benefited from a notable gross margin boost due to tariff refunds, which allowed it to reduce product costs. Despite challenges, Dickson emphasized that the company maintains a disciplined approach and is moving toward sustained relevance and revenue growth across its portfolio.