Old Navy slashes sales forecast as fashion missteps weigh on growth

Old Navy is expanding its product range and adjusting its sales outlook for the year. The retailer, known for targeting low- to middle-income shoppers, reported a modest rise in first-quarter sales but faces challenges in key categories like women’s dresses and swimwear. New initiatives, including a beauty line and a sports licensing deal, are now underway to boost growth. The company’s first-quarter sales reached $2 billion, marking a 1% increase from the same period last year. Despite this growth, some areas struggled—particularly women’s dresses, which underperformed due to fashion missteps. Swimwear and shorts also fell short of expectations during the quarter.

Old Navy now expects full-year sales to rise by just 1 to 2%, lower than previously forecast. Comparable sales for the second quarter are projected to drop by a low single-digit percentage. To address these challenges, the brand has hired Michael Francis as chief customer officer, tasking him with refining customer engagement strategies.

In a bid to diversify, Old Navy is rolling out beauty products across all stores by the end of the year. A new activewear line, Old Navy Sport, is also in development. Additionally, the retailer has partnered with Fanatics, a major sports licensing company, to expand its merchandise offerings. The retailer’s latest moves signal a push to revitalise sales amid mixed performance. Beauty products, activewear, and sports-licensed goods will soon join its core offerings. With adjusted forecasts and new leadership in place, Old Navy is focusing on stabilising growth in the coming months.