Gap shares jump 12% after company names new Old Navy CEO to revive struggling brand

Gap on Thursday announced a new CEO for its Old Navy banner, effective Nov. 2, as the retailer tries to reinvigorate sluggish sales performance at the brand.

Michael Francis, who was appointed the chief customer officer at Old Navy in May , will take over the reins from current CEO Haio Barbeito, who will become an advisor to the company. Barbeito has held the position since 2022.

Gap CEO Richard Dickson told CNBC the move was "a planned and thoughtful transition" to better equip Old Navy for its next chapter.

"We've been working — from fixing fundamentals to building momentum and ultimately looking to accelerate growth, and so there's not a change in strategy," Dickson said in an interview. "We're just going to continue to execute better, continuously improve our core business, while we drive some accelerators that we're really excited about."

In the company's fiscal second-quarter earnings report , Old Navy posted net sales of $2.1 billion — down 4% year over year. Comparable sales were also down 4%, versus comparable sales growth of 2% during the same period last year. Wall Street analysts were expecting a decline of 2.4% for the most recent period, according to StreetAccount.

It marked Old Navy's first negative same-store sales figure since the second quarter of 2023 and was due in part to "unanticipated slowdown in traffic," the company said. The brand contributes nearly 60% to Gap's overall revenue.

Dickson told CNBC that Old Navy specifically saw disappointing results from its summer marketing, which he said "lacked a direct product message." But he added that the brand has already begun to see "significant improvement" in its traffic and sales this past month.

Incoming CEO Francis said in a statement the brand would "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."