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Gap Stock Just Jumped 14%—But Can Old Navy Ruin The Comeback?

Gap gave investors plenty to celebrate after its latest earnings report, sending the stock up 14% as stronger-than-expected profits, higher full-year earnings guidance and a leadership change at Old Navy revived confidence in the retailer’s turnaround. Yet underneath the rally sits a striking divide. The flagship Gap brand is enjoying one of its strongest runs in years, with comparable sales rising 10%, customers returning, discounting falling and younger shoppers showing renewed interest. Old Navy, the company’s largest brand, moved in the opposite direction, posting a 4% comparable-sales decline after merchandising, pricing and marketing decisions failed to deliver. Athleta remains under even greater pressure, while Banana Republic continues to improve steadily. Management argues that Old Navy’s problems are largely execution-related and that August trends already show improvement.