Gap (GPS) is in a crisis, having tried unsuccessfully for years to turn business around. The company has booted its top designer and its president, and is desperate to get back on track by the holidays. Gap cut its full-year profit forecast this afternoon, and the stock has dropped nearly 13% in after-hours trading.

"I have a much higher sense of urgency," chief executive Glenn Murphy said in a rare interview. "This brand is just too damn important to not see that kind of effort being put forward," he told The Wall Street Journal.

The biggest priority for Gap is women's shirts. Gap can't get them right, and sales have been a mess for years, writes Elizabeth Homes. Sales at the Gap's 1,000 U.S. stores have fallen 32% since 2004. Now, Gap's North American stores contribute just a quarter of overall revenue, which isn't helping fund overseas expansion enough.

Post continues after this video about Gap's issues:

The problem? Gap is just too middle-of-the-road. In the economic turmoil of the last few years, U.S. shoppers have gone down two paths when it comes to clothing. One group is downsizing to cheaper basics at Target (TGT) and other stores, including the Old Navy brand also owned by Gap. The other group still buys the pricier items at stores like Banana Republic (also owned by Gap).

The Gap brand has become the forgotten middle child.

Another problem is that Gap clothes have lost that wow factor. Murphy himself describes the women's clothes as "dull." He also tells the Journal he doesn't like the "dusty, makeup colors" such as the pale pinks and beiges currently in Gap stores.

So the question is whether Gap can revive women's clothing in time for the holidays. Murphy says that the denim selection is doing fine, as are the kids and men's collections.

Gap cut its full-year profit outlook this afternoon, citing big cost increases as the price of cotton and production continues to rise. The company says its product costs will likely rise 20% later this year -- far more than any price increase it can put on its clothes.

Investors booed the news, sending Gap shares down nearly 13% in after-hours trading to $20.30.

Profit fell nearly 23% in the first quarter, which ended April 30, the company said today. That's about 40 cents a share, down from 45 cents a share a year ago. Still, that's better than the 39 cents a share analysts were looking for.

Sales were not a pretty picture. Net sales fell 1% to $3.3 billion. If you look at sales only at stores open at least a year, it was even worse, with sales down 3%. All three of Gap's chain brands saw sales slide in North America. International sales weren't a bright spot either, with same-store sales down 6%.

Murphy said he was "disappointed" in the quarter, Reuters reported. Now, Gap says its full-year profit will only be between $1.40 and $1.50 a share. That's down from an earlier estimate of $1.88 to $1.93 a share.