Gap (GPS - Get Report) announced after the bell Thursday that CEO Art Peck would be stepping down and it slashed its full-year earnings forecast, putting its recent restructuring plans at risk.

Peck, who has led the group since 2015, had steered plans to close more than half of its Gap-branded stores and spin-off its Old Navy division into a standalone business by 2020. He will be replaced by board chairman Robert Fisher, a member of the retailer's founding family.

Separately, however, the Gap said it sees full-year earnings in the region of $1.70 to $1.75 per share, sharply lower than its prior forecast of $2.05 to $2.15 per share, and forecast a third-quarter sale slump of around 4% across all of its retail brands, including Old Navy.

"This was a challenging quarter, as macro impacts and slower traffic further pressured results that have been hampered by-product and operating challenges across key brands," said CFO Teri List-Stoll. "We have tremendous confidence in our brands and the talented organization that supports them, and we are seeing progress in some key areas. However, there is more work to do to leverage the capabilities we have invested in and deliver the profitable growth we know these brands are capable of delivering."

Action Alerts PLUS senior portfolio analyst Jeff Marks noted that he doesn't believe that millennials don't resonate with Gap as much as they did before. 

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