Telsey Advisory Group chief analysis officer Dana Telsey unpacks retail expectations for the vacation season on ‘Barron’s Roundtable.’
Foot Locker shares fell on Wednesday after the retailer severely missed Wall Road’s quarterly earnings estimates and minimize its full-year gross sales and earnings forecast.
The retailer’s inventory fell by as a lot as 16% throughout morning buying and selling as the corporate reported that it incurred a lack of $33 million, or 34 cents per share, for the three-month interval ending on Nov. 2. That is down considerably from the $28 million it reported in the identical interval a yr in the past.
Complete gross sales for the quarter slipped 1.4% to $1.96 billion, which was under Wall Road estimates of $2.01 billion. Foot Locker reported adjusted earnings per share of 33 cents, which was additionally under Wall Road’s expectations of 41 cents.
NOTHER EXIT: FOOT LOCKER TO RELOCATE HEADQUARTERS FROM NEW YORK TO FLORIDA
Foot Locker CEO Mary Dillon blamed the miss on softer client spending.
“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,” Dillon mentioned.
A view of “Home Court” within the Foot Locker Melbourne Central Idea Retailer on Oct. 23, 2024, in Melbourne, Australia. (Kelly Defina / Getty Photos)
Dillon mentioned the corporate did see “a meaningful and positive acceleration” in client spending in shops over the important thing Thanksgiving week interval.
Nonetheless, the corporate is taking a extra cautious outlook “due to a more promotional environment and softer consumer demand outside of key selling periods,” Dillon mentioned.
NIKE’S NEW CEO: WHAT TO KNOW
She famous that the corporate is optimistic about its skill to drive shareholder worth with its methods, together with revamping shops and its digital expertise, the current launch of its new cellular app and enhanced FLX Rewards Program.
The Foot Locker brand is displayed in a retailer on Could 19, 2023, in San Francisco. ( / Getty Photos)
Foot Locker now expects full-year gross sales to fall between 1% and 1.5%. Its earlier steerage was down 1% to up 1%.
The corporate additionally expects adjusted earnings per share to be between $1.20 and $1.30, under earlier expectations of between $1.50 and $1.70 per share.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
The report comes as its rival Nike additionally works to make sure long-term viability. Nike, which ousted CEO John Donahoe in September, reported in its prior earnings report that income fell 10% to $11.6 billion.
“We are moving aggressively to shift our product portfolio, create better balance in our business, and reenergize brand momentum through sport. That said, a comeback at this scale takes time. And while there are some early wins, we have yet to turn the corner,” Nike CFO Matthew Buddy advised analysts.
