Gap Inc. announced a leadership change at its Old Navy division, naming Michael Francis as the new chief executive officer effective November 2. Francis, who was appointed chief customer officer at Old Navy in May, will replace Haio Barbeito, who has held the position since 2022 and will transition to an advisory role at the company.
The announcement came as Old Navy continued to face sales challenges. In the company’s fiscal second-quarter earnings report, Old Navy posted net sales of $2.1 billion, down 4% year over year, with comparable sales also declining 4% compared to 2% growth in the same period last year. Wall Street analysts had expected a decline of 2.4% for the quarter. The company attributed the downturn partly to an unanticipated slowdown in traffic and acknowledged that its summer marketing campaign lacked a direct product message. However, management indicated that recent weeks have shown significant improvement in traffic and sales.
Gap CEO Richard Dickson characterized the CEO transition as a planned move to better position Old Navy for growth. He emphasized that the company would continue executing its existing strategy while driving accelerators already underway. Francis stated in a statement that the brand would sharpen its customer focus, strengthen cultural relevance, and enhance the customer experience across all touchpoints.
Overall, Gap reported mixed second-quarter results, beating earnings per share estimates while missing revenue expectations. The company’s comparable sales declined 1% company-wide, including a 3% year-over-year decline in in-store sales. The Gap banner performed well with 10% comparable sales growth, while Banana Republic saw 3% growth. Athleta, however, experienced a 12% decline in comparable sales. For the full fiscal year, Gap narrowed its net sales growth outlook to between 1% and 1.5% but raised its adjusted earnings per share guidance to a range of $2.35 to $2.45.
Market response to the Old Navy leadership announcement was positive, with Gap shares jumping 12% in extended trading Thursday following the news.
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