Gap Inc. has appointed Michael Francis as Chief Executive Officer of its Old Navy division, with the role effective November. The move comes as Old Navy has been reporting declining comparable sales, a metric that measures revenue at stores open at least a year. Gap shares moved higher on the announcement.
Old Navy is Gap Inc.'s largest revenue-generating brand, so a leadership change there carries more weight than a similar move at Athleta or Banana Republic. If Francis stabilizes comparable sales, it directly improves Gap's consolidated top line and operating margin. Investors are treating the hire as a signal that management is taking the brand's underperformance seriously.
Gap's next quarterly earnings report (date to be confirmed, typically late November or early December for Q3 fiscal results). Watch for any commentary on Old Navy's comparable sales trend and early reads on holiday trading.
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