New York City, New York – Foot Locker, a leading retail company, has reaffirmed its fiscal year guidance with projected sales between a 1% decline and a 1% gain. This projection surpasses the 0.6% decline that analysts had anticipated, as reported by LSEG.
In comparison to Wall Street expectations, Foot Locker exceeded estimates with an adjusted earnings per share of 22 cents, compared to the expected 12 cents, and revenue of $1.88 billion, in line with analyst forecasts. The company’s net income for the quarter ending May 4 was $8 million, or 9 cents per share, down from $36 million, or 38 cents per share, a year prior, after one-time adjustments.
Despite a 3% decrease in sales from a year ago, amounting to $1.88 billion, Foot Locker anticipates adjusted earnings per share for the full year to be between $1.50 and $1.70, surpassing the estimated $1.57, based on LSEG data.
CEO Mary Dillon expressed confidence in Foot Locker’s performance, citing a strong start in the first quarter due to the success of their ‘Lace Up Plan’. Dillon highlighted upcoming initiatives such as the enhanced FLX rewards program and a revamped mobile app to drive customer engagement and boost commerce. The company is also optimistic about growth opportunities with brand partners, particularly with Nike during the holiday season.
Dillon, formerly of Ulta Beauty, has been dedicated to revitalizing Foot Locker, despite facing challenges such as declining sales, particularly at their Champs Sports banner where comparable sales plummeted by 13.4%. The company has relied on promotions to drive sales but has struggled to regain investor confidence, with shares down approximately 28% year to date.
In efforts to address these challenges, Foot Locker is working on store revamps to enhance the consumer experience and attract top brand products. The company’s innovative ‘store of the future’ concept, unveiled in April, aims to transform the traditional Foot Locker format into a ‘house of brands’ model, highlighting a new approach to store design and product display.
Looking ahead, Foot Locker anticipates comparable sales growth between 1% and 3%, outpacing the 1.5% growth expected by analysts from StreetAccount. Despite ongoing pressures from inflation affecting their core consumers, Foot Locker aims to cater to customers by offering quality products at competitive prices, reflecting consumer trends towards purposeful spending.