Gap Inc. reported sales that came in under expectations for the Q2 period ended Aug. 1, according to an earnings release. Old Navy, which represents the largest part of Gap Inc.’s revenue, was a drag on the results. Comparable sales at Old Navy declined 4% year over year to $2.1 billion as summer marketing initiatives failed to deliver the anticipated amount of traffic, Gap Inc. CEO Richard Dickson said on a call discussing the earnings with analysts.
The retailer also announced it was replacing Old Navy’s CEO following several quarters of lagging performance, a move the company said was a planned transition. The brand has quickly “rewired” its marketing strategy heading into the key fall months and is placing a larger emphasis on denim, which performed well in the first half, according to Dickson.
“We are building Old Navy as a denim destination,” Dickson said on the earnings call.
Old Navy earlier in August launched an ad campaign that shows Cardi B sporting wide-cut jeans alongside influencers and models including Quenlin Blackwell, Paloma Elsesser and Brooks Nader. The “Most Wanted Denim” effort has quickly become the “most-viewed campaign in Old Navy's history” and the brand is already seeing significant traffic improvements in August, Dickson explained. Old Navy is also collaborating with creator MrBeast for its back-to-school marketing with a new multipart content series.
“With improved execution in August, we have seen the business pick up, reinforcing our confidence in the actions we are taking,” Dickson said. “We are clear on the path forward, and we believe we can drive stronger results from here.”
Also in turnaround mode is Athleta, which experienced another double-digit drop in comparable sales in Q2. The activewear marketer, which is Gap Inc.’s smallest brand by revenue, earlier this week debuted a fall 2026 campaign that serves as the launchpad for a broader revamp of its marketing.
Athleta is focusing on bolder purpose-driven messaging and visually distinct storytelling, with new ads spotlighting women who excel in typically male-dominated fields. The brand is also investing more in social media, CMO Erika Everett recently told Marketing Dive. Athleta partnered with Invisible Dynamics on its brand transformation work, the same shop that previously helped Gap mount a comeback.
Gap’s momentum continued in Q2, with comparable sales rising 10%, its 11th straight quarter of positive performance. Marketing for Gap Inc.’s namesake brand has dependably mixed together celebrities, music and pop culture nostalgia to drive consumer appeal and cultural relevance.
A ‘90s-themed partnership with Hailey Bieber promoted a jean capsule collection that quickly sold out and created a “meaningful halo across the broader business,” Dickson said. Gap’s fall seasonal campaign stars "Obsession" actor and new X-Men cast member Inde Navarrette and singer-songwriter Malcom Todd as they dance to Todd’s cover of “Dancing on My Own.”
