Gap Inc. said late Monday Chief Executive Sonia Syngal will step down after “a brief transition,” and warned of margin “headwinds” as it pays more for shipping and raw materials.
Executive Chairman Bob Martin will serve as interim CEO, the retailer said.
Gap
GPS,
-2.23%
shares fell nearly 2% in the after-hours session after ending the regular trading day down 1.6%.
In addition to the CEO news, the retailer also warned that fiscal second-quarter sales will fall in the about “high-single-digit range,” which the company said was “relatively” in line with its expectations.
Gap “continues to navigate margin headwinds and, as previously communicated, still expects to incur an estimated $50 million of transitory incremental air-freight expense in the quarter as well as inflationary costs on raw materials and freight,” the company said.
It also has taken a “more aggressive approach” to its merchandise offering, which has resulted in increased promotional activity during the quarter, impacting margins, Gap said.
Gap said it expects an adjusted operating margin percentage to be between zero and slightly negative.
Gap is scheduled to report second-quarter earnings on Aug. 25. Analysts polled by FactSet expect adjusted earnings of 18 cents a share on sales of $3.8 billion. That would compare with second-quarter 2021 adjusted earnings of 70 cents a share on sales of $4.2 billion.
Syngal was appointed Gap CEO in early March 2020 after more than a decade with the company, including some four years leading Gap’s Old Navy division.
Syngal took over from Art Peck, who left in late 2019. At the time, Gap had planned to spin off its Old Navy brand, a plan the retailer abandoned in January 2020.
Also Monday, Gap announced it had appointed Horacio Barbeito as president and Chief Executive of Old Navy, effective Aug. 1. Gap said in April that Old Navy President and Chief Executive Nancy Green was leaving.
