An employee hands a shopping bag to a customer at an Old Navy Inc. store in San Francisco.
David Paul Morris | Bloomberg | Getty Images
Gap Inc. announced Thursday that Old Navy Division CEO Nancy Green is leaving the company this week.
Gap chief executive Sonia Syngal will work closely with the Old Navy team as it searches externally for Green’s replacement, the company said in a press release.
Gap also lowered its guidance for net sales growth in the first quarter of fiscal 2022 amid so-called “execution challenges” within its old-navy business. It now forecasts a low- to mid-teens decline year-over-year, adjusted from an earlier one Forecast calling for declines in the mid to high single digits.
News of Green’s abrupt exit comes as Gap struggles to weather ongoing logistical disruptions and rising inflation that threatens to choke consumer spending.
A convoluted supply chain was particularly hard on Old Navy’s division, which targets lower-income consumers, the company said when it reported earnings results in early March. Late deliveries have meant that in some cases the retailer did not have enough stock to meet buyer demand.
In the fiscal fourth quarter, same-store sales at Old Navy were flat compared to 2019.
Gap said Thursday that it also took a “more aggressive approach” to balancing its inventory at Old Navy, resulting in higher advertising levels. It offered no further clarity on the matter, but further discounts are likely to weigh on the retailer’s profits.
Gap said it will provide an updated fiscal 2022 outlook when it reports quarterly earnings on May 26.
“As we seek to leverage Old Navy’s potential, particularly amid the macroeconomic dynamics our industry is facing, we believe now is the right time to hire a new leader,” Syngal said of Green’s departure .
She added that the company is looking for someone with “operational rigor and creative vision” to execute the retailer’s plan.
Gap shares fell nearly 11% in extended trading on the news. The stock is down about 19% year-to-date through Thursday’s close.
Gap’s full press release can be found here.
https://www.cnbc.com/2022/04/21/old-navy-ceo-to-exit-as-parent-company-gap-cuts-sales-guidance.html Old Navy CEO resigns as parent company Gap cuts sales forecasts