Gap CEO Syngal exits as margin squeeze deepens

Gap (GPS) fell 5.0% today after the retailer said CEO Sonjia Syngal is stepping down, effective immediately. The company also expects its adjusted operating margin percentage to be zero to slightly negative in the second quarter due to higher promotional activity. “While the macro is far from good today, the majority of these issues appear to be self-inflected and centered on Old Navy,” says Wells Fargo analyst Ike Boruchow, who downgraded GPS stock to Equalweight from Overweight (the equivalents of Hold and Buy, respectively. “As such, we remain cautious about our space. We simply cannot continue to recommend a name that is juggling company specific challenges on top of growing macro pressure.”