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Shares of Gap Inc (NYSE:GPS) fell over 3% after-hours Monday after announcing that President and CEO Sonia Synga will be stepping down from the company. The retailer named Chairman Bob Martin as president and CEO on an interim basis while it will it conducts a search for a new president and CEO.
“My fellow board members and I want to thank Sonia for her steadfast leadership and many contributions to Gap Inc. during her 18 years with us. Most notably, amidst significant global disruption, social unrest and economic instability, Sonia had an immediate impact as Gap Inc. CEO, establishing a clear strategic direction and cultural identity that has united this global enterprise as a force for good with powerful brands poised to stand the test of time,” said Mr. Martin. “While a search is underway, the Board has complete confidence in the formidable leadership team to guide the company through this transition. And I look forward to championing this incredible team as they continue to write Gap Inc.’s next chapter with grit and passion.”
The company also announced that Horacio “Haio” Barbeito will join the Gap Inc. Leadership Team as president and chief executive officer of Old Navy. Barbeito most recently served as President and CEO of Walmart (NYSE:WMT) Canada.
Gap also provided an update on its second-quarter outlook. The company is expecting net sales in the second-quarter fiscal 2022 to decline in the approximately high-single digit range, relatively in-line with its prior expectations. Gap also said it has taken a more aggressive approach to assortment balancing resulting in increased promotional activity during the quarter, which it expects will have a negative impact on gross margin in the quarter. Furthermore, the company now anticipates second-quarter fiscal 2022 adjusted operating margin percentage to be zero to slightly negative.
The company will report its second-quarter fiscal 2022 financials as well as its outlook when it reports second-quarter fiscal 2022 results on Thursday, August 25.
