The Foot Locker store is located on 34th Street in New York City.
Courtesy: Foot Locker
Foot cabinet On Wednesday, after reporting a rough set of quarterly results, the company slashed its full-year guidance, which could be a warning sign for its largest brand partner Nike.
The sneaker giant missed Wall Street expectations for both revenue and profit, blaming weak consumer demand and increased promotions across the market.
Foot Locker’s shares fell 15% in pre-market trading after the company announced its results.
Foot Locker’s fiscal third-quarter performance compared to Wall Street expectations is as follows, according to a survey of analysts by LSEG:
- Earnings per share: Adjusted 33 cents, expected 41 cents
- income: $1.96 billion vs. $2.01 billion expected
Foot Locker lost $33 million, or 34 cents a share, in the three months ended Nov. 2, compared with a profit of $28 million, or 30 cents a share, a year earlier. Excluding one-time items related to atmos brand impairment charges and other charges, Foot Locker reported profit of $31 million, or 33 cents per share.
Sales fell to $1.96 billion, down about 1.4% from $1.99 billion a year earlier.
“Following the back-to-school peak in August, consumer spending trends have softened and the promotional environment has been more benign than expected,” CEO Mary Dillon said in a press release. “During the critical Thanksgiving week, we saw some Significant and positive acceleration, particularly in stores, despite strong performance, we are taking a more cautious stance and lowering our full-year sales and earnings expectations due to a more active promotional environment and a weaker economy.
Foot Locker expects holiday quarter sales to fall 1.5% to 3.5%, compared with sales growth of about 2% in the same period last year. The company said it added one sales week last fiscal year.
According to LSEG, Foot Locker’s outlook is worse than the 1.6% decline analysts expected. According to StreetAccount, comparable sales are expected to grow 1.5% to 3.5%, well below the 3.4% growth forecast.
Foot Locker now expects full-year sales to fall 1% to 1.5%, compared with previous guidance of a 1% decline to 1% growth. Analysts expected a 0.4% drop, according to LSEG.
The retailer also lowered its full-year comparable sales forecast, now expecting comparable growth to be between 1% and 1.5%, compared with previous guidance of 1% to 3%. Analysts expected the gauge to rise 1.8%, according to StreetAccount.
Foot Locker also lowered its full-year profit forecast and now expects adjusted earnings per share to be between $1.20 and $1.30, below Wall Street expectations of $1.54. Foot Locker had expected earnings in a range of $1.50 to $1.70 per share.
The company attributed the revised guidance in part to increased promotions and a shortened year, which it expects will impact sales by about $100 million.
Despite significant guidance cuts and a bleak holiday outlook, some Highlights period. for second consecutive seasonFoot Locker’s comparable sales increased compared with the previous year, an increase of 2.4%. The figure was lower than analysts’ expectations of 3.2%, according to StreetAccount, but it’s indicative of Dillon’s Turnaround plan is continuing to show signs of life.
Champs, which has been a drag on Foot Locker’s overall business, also reported positive comparable sales growth, up 2.8%, as did WSS, up 1.8%.
