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Gap shares jump after canceling plans to spin off Old Navy

The Gap Inc. shares jumped more than 6% in late trading Jan. 16 after announcing that it no longer plans to spin off Old Navy and intends to appoint a new CEO to oversee its full portfolio of brands.

The company's board has concluded that the "cost and complexity of splitting into two companies" limited the company's ability to create "appropriate value from separation," Robert Fisher, Gap interim president and CEO said in a statement.

The retailer originally announced its plans to split into two independent publicly traded companies in February 2019.

Gap also said Jan. 16 that Neil Fiske, president and CEO of Gap brand, will leave the company.

In addition, Gap said it expects its adjusted fiscal year 2019 EPS to be moderately above its previous guidance of $1.70 to $1.75 due to better-than-expected promotional levels over the holiday period, particularly at Old Navy.

Fiscal 2019 comparable sales and net sales are both expected to be at the higher end of its previous guidance range of down mid-single digits and down low single digits, respectively.

The company's shares were up 6.5% to $19.81 in after-hours trading.