Gap Inc. saw its shares tumble by 14% following a mixed fiscal first-quarter performance that prompted the retailer to lower its full-year sales guidance. While the company managed to beat earnings expectations, the lackluster performance of its largest brand, Old Navy, weighed heavily on investor sentiment. The company now projects annual sales growth between 1% and 2%, a downward revision from its previous forecast of 2% to 3%.

CEO Richard Dickson attributed the shortfall at Old Navy to a spring and summer product assortment that failed to resonate with shoppers. Despite the brand accounting for nearly 60% of the company’s total revenue, Dickson emphasized that the issue was not rooted in broader macroeconomic trends or a decline in consumer spending power. Instead, he pointed to specific seasonal categories, such as dresses and swimwear, which underperformed, while core segments like denim and activewear remained resilient.

Despite the sales outlook adjustment, Gap raised its profitability expectations for the year, now anticipating adjusted earnings per share between $2.30 and $2.40. CFO Katrina O’Connell noted that this optimism is supported by favorable tax rates and interest income. The company is also strategically reserving funds to manage potential fuel cost fluctuations and to fuel future promotional efforts if necessary to stimulate demand.

Performance across the company’s portfolio remained varied. The namesake Gap brand saw a significant turnaround with comparable sales jumping 10%, far exceeding analyst expectations. Conversely, the Athleta brand continued to face challenges, recording an 11% decline in comparable sales. Meanwhile, Banana Republic saw modest growth of 2%, as the company prepares for new leadership under incoming CEO Donald Kohler to guide the brand’s next phase of development.