Research Update: The Gap Inc. Outlook Revised To Negative From Positive On Performance Challenges; Ratings Affirmed

San Francisco-based specialty apparel retailer The Gap Inc. did not keep last year's good operating momentum. We expect operating results will remain under pressure this year due to more promotional activity and a softening U.S. economy. The company faces execution challenges at its Old Navy brand, which have been worsened by inflationary costs and slowing demand trends in its most recent quarter. In addition, it announced on July 11, 2022, that president and chief executive officer Sonia Syngal stepped down from her position and from the board. Therefore, we revised our outlook to negative from positive and affirmed all our ratings on Gap, including our 'BB' issuer credit rating. The negative outlook reflects our expectation that operating results will remain

...- San Francisco-based specialty apparel retailer The Gap Inc. did not keep last year's good operating momentum. We expect operating results will remain under pressure this year due to more promotional activity and a softening U.S. economy. - The company faces execution challenges at its Old Navy brand, which have been worsened by inflationary costs and slowing demand trends in its most recent quarter. In addition, it announced on July 11, 2022, that president and chief executive officer Sonia Syngal stepped down from her position and from the board. - Therefore, we revised our outlook to negative from positive and affirmed all our ratings on Gap, including our '##' issuer credit rating. - The negative outlook reflects our expectation that operating results will remain challenged by ongoing macroeconomic trends and execution risks at Old Navy. We could lower our rating over the next 12 months if credit metrics weaken beyond our expectation....

Research Update