Business & Finance
Gap names new Old Navy CEO following fiscal second-quarter sales decline
Michael Francis will succeed Haio Barbeito as Old Navy's chief executive in November after sluggish summer performance weighed on Gap Inc.'s quarterly sales.
The short version
- Gap Inc. appointed Michael Francis as the new CEO of Old Navy effective November 2, replacing Haio Barbeito, who will transition to an advisory role.
- Old Navy's fiscal second-quarter net sales fell 4% year over year to $2.1 billion, dragging Gap's overall quarterly revenue down to $3.65 billion and missing Wall Street sales estimates.
- Despite revenue shortfalls at Old Navy and Athleta, strong performance at the flagship Gap banner helped the parent company beat quarterly earnings per share expectations and raise its full-year earnings guidance.
- Gap adjusted its full-year net sales growth forecast to a range of 1% to 1.5% and expects the remainder of an estimated $512 million tariff refund in its third quarter.
Key facts
- Gap announced that Michael Francis, appointed chief customer officer of Old Navy in May, will become the brand's CEO on November 2, succeeding Haio Barbeito.[CNBC]
- Old Navy reported fiscal second-quarter net sales of $2.1 billion, representing a 4% year-over-year decline in both net and comparable sales.[CNBC]
- Gap Inc. generated $3.65 billion in second-quarter revenue, missing analyst projections of $3.69 billion, while posting adjusted earnings per share of 52 cents compared to the expected 48 cents.[CNBC]
- The flagship Gap brand saw comparable sales rise 10% with net sales reaching $844 million, while Banana Republic comparable sales increased 3% and Athleta comparable sales dropped 12%.[CNBC]
- Gap narrowed its full-year net sales growth forecast to between 1% and 1.5%, down from 1% to 2%, while increasing its full-year adjusted earnings per share target to between $2.35 and $2.45.[CNBC]
- Gap received $95 million in tariff refunds during the quarter out of an anticipated total tariff refund impact of approximately $512 million.[CNBC]
What remains uncertain
- The exact timing and amount of the remaining expected tariff refund to be received during the third quarter remain to be fully realized.[CNBC]