Sportswear and footwear retailer Foot Locker has revised its outlook for the full fiscal year 2024 following a 1.4% drop in sales to $1.95bn during the third quarter.
The decline is notable compared to the $1.98bn reported in the same quarter of 2023.
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Despite the overall sales dip, comparable sales saw an increase of 2.4%, with global Foot Locker and Kids Foot Locker showing 2.8% growth.
Champs Sports and WSS banners also experienced positive comparable sales growth of 2.8% and 1.8% respectively.
The net loss for Foot Locker stood at $33m in the quarter ended 2 November 2024, a stark contrast to its net income of $28m in the corresponding period of the previous year. Loss per share was reported at $0.34, down from earnings of $0.30 per share in Q3 FY23.
On a non-GAAP [generally accepted accounting principles] basis, net income reached $31m for the third quarter, slightly higher than the $28m reported in the same period of 2023. Non-GAAP earnings per share were $0.33, compared to $0.30 in Q3 FY23.
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By GlobalDataThe gross margin for Foot Locker increased by 230 basis points in Q3 FY24, driven by reduced markdown levels. However, this performance fell short of expectations due to an elevated promotional environment.
SG&A expenses as a percentage of sales rose by 210 basis points, influenced by investments in technology and brand-building and partially offset by savings from cost optimisation efforts and ongoing expense discipline.
Foot Locker president and chief executive officer Mary Dillon said: “Our team’s continued focus on execution drove positive comparable sales trends and meaningful gross margin expansion in the quarter. However, our third quarter top- and bottom-line performance fell short of our expectations. Consumer spending trends softened following the peak back-to-school period in August, and the promotional environment was more elevated than anticipated.”
For the full year, Foot Locker now anticipates sales to decline between 1.5% and 1%, adjusting previous expectations from a 1% decline to potential 1% growth
Comparable sales are expected to grow between 1.0% and 1.5%, revised down from earlier forecasts of 1% to 3.%.
Dillon further stated: “Despite strong performance, we are taking a more cautious view and are lowering our full-year sales and earnings outlook due to a more promotional environment and softer consumer demand outside key selling periods.”
In the third quarter, Foot Locker opened ten new stores, closed 24, remodelled or relocated 20, and updated 167 stores to the latest design standards. As of 2 November 2024, the company operated 2,450 stores in 26 countries.
In April 2024, it revealed a new retail concept designed to improve shopping experience and customer service.
