Gap Stock Jumps 11% on Earnings Beat and Old Navy CEO Change

TLDR

• GAP stock surged 11% after reporting Q2 EPS of $0.52, beating the $0.48 Wall Street estimate
• Revenue came in at $3.65 billion, slightly below the $3.69 billion consensus forecast
• Old Navy, which drives nearly 60% of Gap’s revenue, saw sales fall 4% year-over-year in Q2
• Gap named Michael Francis as the new Old Navy CEO, replacing Haio Barbeito effective November 2
• UBS raised its price target on GAP to $42 from $40, maintaining a Buy rating

Gap reported Q2 earnings per share of $0.52, topping Wall Street’s estimate of $0.48. Revenue for the quarter came in at $3.65 billion, just below the $3.69 billion analysts had forecast. The stock jumped 11% on the news.

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The earnings beat came alongside a leadership shake-up at Old Navy. Michael Francis, currently the brand’s chief customer officer, will take over as CEO from Haio Barbeito on November 2. Barbeito has been in the role since 2022.

Old Navy posted Q2 sales of $2.1 billion, down 4% year-over-year. Comparable sales also fell 4%, worse than the 2.4% decline Wall Street had penciled in. A year ago, the brand was posting 2% comparable sales growth.

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