Gap cuts sales outlook after Old Navy drop

• Gap lowered its full-year net sales growth forecast after Old Navy sales declined more than expected in the second quarter.
• Second-quarter revenue fell 2% to $3.65 billion, while net income increased to $501 million.
• Gap raised its adjusted EPS outlook and appointed Michael Francis as Old Navy president and CEO.

Gap (NYSE:GAP) lowered its full-year 2026 net sales growth forecast after Old Navy reported weaker-than-expected second-quarter results, with company revenue declining 2% to $3.65 billion.

The company now expects full-year net sales growth of 1% to 1.5%, compared with its previous forecast of 1% to 2%, after revising Old Navy comparable sales expectations to flat to down 1%.

Old Navy reported second-quarter net sales of $2.1 billion, down 4% year over year, while Gap brand net sales increased 9%, Banana Republic revenue rose 1%, and Athleta revenue declined 12%.

The company raised its full-year adjusted diluted earnings per share forecast to $2.35–$2.45 from $2.30–$2.40.

Gap reported second-quarter net income of $501 million, or $1.38 per diluted share, compared with $216 million, or $0.57 per share, a year earlier, while adjusted diluted earnings per share reached $0.52.

The company also announced Michael Francis will become Old Navy president and CEO effective November 2, 2026, replacing Haio Barbeito, after previously serving as Old Navy’s chief customer officer.