Home / Business and Economy / Old Navy CEO Out Amid Sales Slump
Old Navy CEO Out Amid Sales Slump
7 Sep
Summary
- Michael Francis appointed new president and CEO of Old Navy.
- Old Navy's net sales fell 4% in the recent quarter.
- Gap Inc. shares surged 14% following the announcement.
The Gap, Inc. has appointed retail veteran Michael Francis as the new president and CEO of its Old Navy brand, effective November 2. Francis succeeds Haio Barbeito, who will transition to an advisory role.
This leadership change occurred as the company reported second-quarter financial results. Old Navy experienced a 4% decrease in net sales, reaching $2.1 billion, with comparable sales also down 4%. This marks the brand's first quarterly comparable sales decline in twelve quarters and fell short of the 2.4% decrease analysts had predicted.
Despite the Old Navy downturn, which contributes nearly 60% to Gap's revenue, the company's overall profitability saw a substantial increase. Operating income more than doubled to $676 million, and net income more than doubled to $501 million. The namesake Gap brand also reported a strong 10% comparable sales growth.
CEO Richard Dickson attributed Old Navy's performance partly to marketing that lacked a clear product message but noted recent improvements in traffic and sales. Francis's appointment, bringing turnaround experience from major retailers, was well-received, contributing to a 14% surge in Gap's stock price.
