With Gap Inc. reporting third-quarter earnings Thursday, investors are looking for answers: Will the spin-off of Old Navy happen as planned by mid 2020 or get postponed; who will be the next chief executive officer, and what’s the strategy for reviving Gap brand?
Gap Inc. — which removed Art Peck as ceo earlier this month, named chairman Robert Fisher interim ceo and pre-reported depressed sales across core divisions — must decide whether to seek a merchant leader for ceo, cast a wider net, or consider an insider.
One possibility is postponing the public spin-off of Old Navy, initially seen occurring in the first half of next year, and shifting Sonia Syngal, president and ceo of Old Navy, to ceo of the overall group. Postponing makes sense considering the business at Old Navy, which accounts for almost half of Gap Inc.’s $16 billion in annual sales, has softened this year and there’s little market receptivity to initial public offerings.
For the third quarter, when comps fell 4 percent, 50 cents to 52 cents in earnings per diluted share are expected, compared to 69 cents in the year-ago period. Gap Inc. reduced its earnings outlook for 2019 to $1.70 to $1.75 per diluted share, from