Gap Inc GPS-N slashed its forecast for quarterly sales on Thursday, blaming execution challenges at its Old Navy brand and “macro-economic dynamics,” sending shares of the retailer down 12% in extended trading.
Gap also said the head of its Old Navy brand, Nancy Green, was leaving the company this week and the company’s Chief Executive Officer Sonia Syngal would lead the team until a successor gets hired.
Several apparel chains, including Gap, have struggled to keep up with rising demand and managing their inventories as supply chain snags delay shipments.
Gap now expects first-quarter sales to decline in the low to mid-teens percentage range from its prior guidance of mid to high-single-digit year-over-year declines.
The retailer, which will report first-quarter results on May 26, said it had to take an “aggressive approach” to balancing inventory that led to increased marketing promotions, especially at Old Navy.
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