Gap Inc. announced a leadership transition at Old Navy, its largest brand by revenue contribution. Michael Francis, who joined the banner as chief customer officer in May, will assume the CEO role on November 2, replacing Haio Barbeito, who has served in the position since 2022. Barbeito will transition to an advisory capacity at the company.
The move comes as Old Navy faces persistent sales challenges. In the company’s most recent quarterly period, Old Navy generated net sales of $2.1 billion, representing a 4% decline year-over-year, with comparable sales also declining 4% compared to 2% growth in the same period the previous year. The performance fell short of Wall Street expectations, which had anticipated a 2.4% decline. Gap CEO Richard Dickson attributed some of the underperformance to ineffective summer marketing campaigns that lacked clear product messaging, though he indicated the brand has shown early signs of recovery in traffic and sales in more recent weeks.
Old Navy accounts for nearly 60% of Gap’s total revenue, making its performance critical to the parent company’s overall financial health. The brand posted its first negative comparable sales figure since the second quarter of 2023, driven partly by an unexpected reduction in customer traffic. Company leadership cited seasonal product assortment issues as contributing factors to the broader earnings miss.
The announcement of Francis’s promotion triggered an immediate market response, with Gap shares climbing 12% in extended trading. Francis indicated his priorities would include strengthening customer focus, enhancing brand relevance, and improving the overall customer experience across all platforms while building on emerging momentum.
Gap’s broader portfolio showed mixed results, with the flagship Gap brand achieving notable gains and Banana Republic demonstrating modest progress, while Athleta continued to struggle. The company maintained a disciplined approach while adjusting full-year guidance, narrowing net sales growth expectations but raising adjusted earnings per share guidance due in part to tariff refund benefits.
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