A GAP sign is seen on a storefront in Pittsburgh on Jan. 12, 2022. Gene J. Puskar/AP Photo
Shares of Gap stock rallied around 12 percent on Aug. 27, as the clothing company brought in Michael Francis as the new CEO for its Old Navy brand.
The San Francisco-based company, whose stock has slipped over 17 percent since the start of the year, on the same day posted its Q2 earnings, which the company said missed expectations.
In announcing the leadership change, Gap President and CEO Richard Dickson said in a company statement: “Michael is one of the most respected commercial, brand, and customer leaders in retail. His experience building iconic brands, cultivating customer connections, and driving transformation at scale will help Old Navy strengthen its relevance, accelerate growth, and deliver even greater value for customers.”
Francis, who succeeds Haio Barbeito, has an extensive retail background, having served as Target’s Chief Marketing Officer from 1994 to 2011, according to LinkedIn.
He also served as a key executive for Walmart for 10 years and was the company’s interim Chief Marketing Officer on two separate occasions before joining Gap as the head of marketing shared services and as Old Navy’s Chief Customer Officer.
The company said in a news release that it is looking for Francis to strengthen the brand’s storytelling across commercial and marketing channels, and elevate the in-store experience for customers.
“Together, we will continue to sharpen our customer focus, strengthen the brand’s cultural relevance, enhance the customer experience across every touchpoint, and build on the momentum already underway,” Francis said in the release.
Gap Inc.’s net sales were down 2 percent compared to last year even though its Gap brand subsidiary was up 9 percent.
The company also revised its fiscal 2026 sales growth outlook to between 1 and 1.5 percent, compared to the 1 to 2 percent it previously predicted. However, it predicts 1.5 to 2.5 percent year-over-year sales growth for its next fiscal quarter.
Banana Republic was the only one of its other subsidiaries to post a positive net sales growth of 1 percent, while sister companies Old Navy and Athleta saw net sales drop 4 percent and 12 percent, respectively, in the second quarter of fiscal 2026.
“We have work to do at Old Navy, but we have a clear understanding of the factors that impacted performance and are taking targeted actions that are already driving improved results,” Dickson said.
Old Navy is by far Gap’s largest brand, recording $2.1 billion in sales compared to less than $1.6 billion for its other three major brands combined.
Gap also said it received $95 million in tariff refunds and $5 million in interest income during the past quarter.
It reported a $417 million cost of goods sold adjustment for tariff recovery and expects to receive the remaining refund and interest next fiscal quarter.
