Lifestyle And Fashion
Gap Inc. shares fell by over 18% as the retailer cut its forecast for quarterly sales accusing execution challenges at its Old Navy brand, and announced that Nancy Green, the CEO of that division, will vacate her post this week.
Gap announced that Executive Officer Sonia Syngal would lead Old Navy until a successor was found and hired.
Gap is now projecting low-to-mid-teens declines compared with 2021, adjusted from an earlier projection that suggested a mid-to-high-single digit decline.
The news of Nancy Green’s abrupt departure as Old Navy’s CEO comes as Gap struggles to weather rising inflation and continued logistics disruptions that threaten to slash consumer spending.
A troubled supply chain has been particularly hard on Gap’s Old Navy division. Delayed shipments have made it difficult for the retailer to meet the shopper demand in some instances.
Gap said that it was taking a more aggressive approach to balance its merchandise assortment at Old Navy, which has resulted in higher promotions. The firm didn’t further clarify its comments, but increased markdowns are likely weighing on the retailer’s profits.
Gap said it would provide an updated fiscal 2022 outlook when it reports quarterly results on May 26, 2022.