(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.
“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.