Gap Inc. announced leadership changes at its Old Navy division on Thursday, naming Michael Francis as chief executive officer starting November 2. Francis, who joined Old Navy as chief customer officer in May, will replace Haio Barbeito, who has served in the role since 2022 and will transition to an advisory position.
The executive shuffle comes as Old Navy faces significant performance headwinds. The division reported net sales of $2.1 billion in the company’s fiscal second quarter, representing a 4% year-over-year decline. Comparable store sales also fell 4%, exceeding Wall Street’s expectation for a 2.4% decrease. The company attributed the decline partly to an unexpected drop in customer traffic and underperformance from summer marketing efforts that lacked clear product messaging. Old Navy accounts for nearly 60% of Gap’s total revenue.
Gap CEO Richard Dickson described the transition as a planned and strategic move to accelerate Old Navy’s growth trajectory. Dickson noted that the brand has already begun showing traffic and sales improvements in the month following the disappointing seasonal results. Francis stated his commitment to strengthening customer focus, brand relevance and the customer experience across all channels.
The broader Gap Inc. reported mixed quarterly results, with comparable sales declining 1% company-wide. The namesake Gap banner performed strongly with comparable sales up 10%, while Banana Republic grew 3%. However, Athleta experienced a 12% decline. Gap narrowed its full-year net sales growth forecast to between 1% and 1.5%, down from prior guidance of 1% to 2%, citing Old Navy’s seasonal product challenges. The company did raise adjusted earnings per share expectations to a range of $2.35 to $2.45 for the full year, aided partly by approximately $512 million in tariff refunds.
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