Gap Inc. Surges 12.9% on Q2 Profit Doubling, New Old Navy CEO

Angelica Ballesteros Fri, August 28, 2026 at 5:53 PM PDT | 3 min read

• GAP: +12.94%
• WMT: +0.45%

Gap Inc. (NYSE: GAP) saw its share price surge 12.94% on Friday, closing at $23.48 per share, after the company named a new chief executive officer to help revive its struggling but highest-revenue-generating brand, Old Navy.

In a statement, the company announced that Michael Francis will serve as the new president and CEO of Old Navy, effective November 2, 2026. He will succeed Haio Barbeito, who will transition into an advisory role.

Investors responded positively to the announcement, given that Old Navy is Gap Inc.'s largest revenue-generating brand.

Who Is Michael Francis?

Francis joined Gap Inc. in March 2026 as chief customer officer and head of marketing shared services for Old Navy.

Prior to Gap, he served as a strategic advisor to Walmart's C-suite and board for a decade, helping the world's largest retailer grow into a nearly $200 billion revenue company. He also supported the launch of dozens of brands for global companies, designers, and cultural icons, drawing on four decades of leadership experience in commercial, marketing, and business transformation.

"Old Navy is poised for its next chapter of growth, and Michael is uniquely equipped to step into this operating role," said Richard Dickson, President and CEO of Gap Inc.

"His experience building iconic brands, cultivating customer connections, and driving transformation at scale will help Old Navy strengthen its relevance, accelerate growth, and deliver even greater value for customers," Dickson added.

Francis is expected to continue the company's ongoing transformation, with a focus on strengthening commercial and marketing channels, enhancing the omni-channel customer experience, and elevating in-store experiences.

Q2 Profits Up

Friday's rally was also driven by strong second-quarter earnings.

• Net income more than doubled to $501 million, up from $216 million in the same period last year.
• Net sales dipped 2% to $3.65 billion, down from $3.7 billion.
• Comparable sales fell 1%.
• Store sales decreased 3%.
• Online sales, which accounted for 35% of total sales, declined 1%.

Q3 Dividends

In line with its results, Gap Inc. announced a dividend of $0.175 per share for all shareholders of record as of October 7, 2026. Payments will be made on October 28, 2026.

Analyst Ratings

Following the earnings report, four investment firms raised their price targets for Gap stock:

• UBS upgraded its target to $42 (from $40), maintaining a buy recommendation.
• TD Cowen set a target of $27 (up from $23), with a buy rating.
• Wells Fargo raised its target to $23 (from $21), with an equal weight rating.
• Morgan Stanley set a target of $23 (up from $21), with an equal weight rating.

Hedge Funds Buy In

More hedge funds appeared to have established positions in Gap Inc. during the second quarter, though conviction remained limited.

According to data from Insider Monkey:

• 36 hedge funds held positions in the stock in Q2 2026, up from 31 in Q1.
• However, committed capital declined 16% to $647.7 million, down from $773 million quarter-over-quarter.

This suggests that while more institutional investors established exposure, they remained cautious about the company's long-term growth story.

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