Gap Shares Surge as Retailer Replaces Old Navy CEO

The transition marks a pivotal moment for Old Navy, which accounts for nearly 60% of Gap’s total revenue. In the second fiscal quarter, the brand reported $2.1 billion in net sales—a 4% year-over-year drop that missed analyst expectations. CEO Richard Dickson attributed the slump to poor execution in seasonal product assortments and ineffective summer marketing that lacked a clear message. Despite the dip, management insists the shift in leadership is a planned move to accelerate growth rather than a broader strategic overhaul.

While Old Navy struggled, other segments of the business showed resilience. The namesake Gap banner outperformed, with comparable sales rising 10%, driven by strong demand for denim and fleece. Conversely, the Athleta brand faced a 12% decline in comparable sales, highlighting the uneven performance across the company’s portfolio. Gap has narrowed its full-year sales growth outlook to between 1% and 1.5%, yet it raised its adjusted earnings guidance to a range of $2.35 to $2.45 per share, bolstered by a significant one-time benefit from $512 million in tariff refunds.