Gap CEO Richard Dickson said Old Navy has diagnosed seasonal product issues and improved its assortment and marketing.
- Gap CEO Richard Dickson said Old Navy has identified its seasonal product issues, particularly around dresses, and is improving its assortment.
- He highlighted the Cardi B campaign, saying it helped sell more than 500,000 cardigans quickly.
- However, retail sentiment on Stocktwits remained bearish.
Gap Inc. (GPS) stock is on track for a monthly loss despite CEO Richard Dickson pointing to progress at Old Navy. The retailer says it has fixed key assortment and marketing missteps, with its Cardi B campaign gaining traction, but investors remain unconvinced that the turnaround can overcome lingering pressure on the business.
Gap stock inched 0.4% higher overnight, ahead of Tuesday. The stock is down 6% this month and is on track to reverse two straight months of gains.
Product And Marketing Missteps Weigh On Old Navy Sales
In fiscal second-quarter (Q2) 2026, Gap’s flagship brand Old Navy saw sales weaken for the first time in 11 quarters. Revenue fell 4% to $2.1 billion, while comparable sales also declined 4%.
This downturn broke a strong multi-year growth streak for the company’s largest banner and pulled down Gap’s overall net sales by 2% globally. The primary problems plaguing Old Navy during the quarter stemmed from misjudged product assortments and marketing friction. Consequently, management adjusted its full-year outlook, anticipating flat to down 1% comparable sales for the remainder of the year, while implementing a leadership transition with Michael Francis slated to take over as brand president and CEO in November.
Gap CEO Sees Early Signs Of A Turnaround
Speaking at the Goldman Sachs Global Consumer and Retail Conference on Monday, Gap CEO Richard Dickson said Old Navy has identified the key issues behind its recent sales weakness and is already adjusting its product mix, marketing strategy and brand focus.
“We missed the seasonal categories. But the good news about it is that we’ve diagnosed it. It is, to some extent, a bit transitory. The transitory drivers really is what we fell short of in the first half. Dresses just didn’t appeal to our consumer for the most part. We had a very big assortment of everyday dresses, and the consumer really wanted the occasion dresses.”
Dickson pointed to Old Navy’s partnership with Cardi B as an example of the retailer’s revised marketing approach. The campaign puts merchandise and pricing more prominently at the center of the message, addressing weaknesses identified in an earlier campaign featuring Paris Hilton. “I’ve been incredibly energized by the way, on the Cardi B campaign.”
“We’ve done a lot of marketing around Cardi B’s cardigan, no-brainer. It’s done incredibly well. I think we sold over 500,000 units in a very short period of time. So we know this flywheel can work.”
Dickson acknowledged that Old Navy still has work ahead, but said the early response to its revamped strategy provides reasons for optimism heading into the second half.
GAP Stock: Retail View
On Stocktwits, retail sentiment around the stock remained in ‘bearish’ territory.
GAP stock has declined over 18% year-to-date.
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