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Gap CEO Peck to leave; earnings forecast cut sends shares tumbling

Published 11/07/2019, 04:59 PM
© Reuters. Peck, CEO of Gap, speaks during the Clinton Global Initiative's annual meeting in New York
GPS
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(Reuters) - Gap Inc (N:GPS) said on Thursday Chief Executive Officer Art Peck will step down and also cut its full-year earnings forecast, blaming slower traffic and operational challenges, sending the apparel maker's shares down 7%.

Peck's departure comes as Gap prepares to spin off its Old Navy brand, a bright spot for the struggling retailer, into a publicly listed company.

He has been with Gap for nearly 15 years and will depart after a brief transition, the company said.

Robert Fisher, the company's current non-executive board chairman, will serve as president and chief executive officer on an interim basis, effective immediately.

The apparel retailer, which estimated a 4% drop in third-quarter same-store sales, now expects full-year adjusted earnings per share of $1.70 to $1.75, down from its previous forecast of $2.05 to $2.15.

© Reuters. Peck, CEO of Gap, speaks during the Clinton Global Initiative's annual meeting in New York

"This was a challenging quarter, as macro impacts and slower traffic further pressured results that have been hampered by product and operating challenges across key brands," Gap Chief Financial Officer Teri List-Stoll said.

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