Gap Inc. (GAP) Soars 12.9% on Q2 Profits, New Old Navy CEO; More Hedge Funds Buy In

Gap Inc. (NYSE:GAP) experienced a 12.94 percent rise in its share price on Friday, closing at $23.48 per share, following the appointment of Michael Francis as the new president and chief executive officer for Old Navy. The company will officially name Francis as CEO on November 2, 2026, with Haio Barbeito stepping into an advisory role.

Investors responded positively to the announcement, particularly noting Old Navy's position as Gap Inc.'s largest revenue-generating brand. Francis, previously a strategic advisor to Walmart and supporting the launch of brands for global companies, brings over four decades of leadership experience in commercial, marketing, and business transformation.

Gap Inc. President and CEO Richard Dickson expressed confidence in Francis's ability to strengthen Old Navy's relevance, accelerate its growth, and deliver greater value for customers. The company's strong Q2 earnings, which saw net income double to $501 million from $216 million, also contributed to the stock's positive momentum.

Despite a 2 percent dip in net sales to $3.65 billion, strong online sales (35 percent of total sales) helped mitigate the decline. Dividends of $0.175 per share were announced for shareholders on record as of October 7, 2026. Four investment firms raised their price targets for Gap Inc.'s stock, with UBS setting a $42 target, TD Cowen proposing $27, Wells Fargo at $23, and Morgan Stanley at $23.

Although hedge funds have recently increased their positions in Gap Inc., institutional investment remains cautious amid limited conviction about the company's long-term growth prospects.