Foot Locker, the athletic-footwear retailer, surpassed quarterly estimates but made adjustments to its financial forecast timeline.
Performance and Market Reaction
In the fourth quarter ending Feb. 3, Foot Locker reported adjusted earnings per share of 38 cents, outperforming Wall Street's projection of 32 cents. The company also reported sales of $2.38 billion, beating the consensus estimate of $2.28 billion. Despite these positive results, same-store sales declined by 0.7% due to various factors such as the repositioning of the Champs Sports banner, consumer softness, and changes in the vendor mix.
Following this announcement, shares of Foot Locker dropped by 8.6% to $31.35 in premarket trading on Wednesday, while S&P 500 futures saw a 0.4% increase.
Revised Financial Outlook
Looking ahead to the fiscal year ending Feb. 1, 2025, Foot Locker anticipates sales growth in the range of negative 1% to up 1%. The company also projects adjusted earnings per share between $1.50 and $1.70, significantly higher than the consensus estimate of $1.35.
Chief Financial Officer Mike Baughn expressed confidence in the long-term earnings potential of Foot Locker's Lace Up plan, which aims to achieve an 8.5%-9% earnings before interest and taxes margin target by 2028, following a two-year delay from the initial projection of 2026. The Lace Up plan is designed to create value for all stakeholders, including customers, the community, team members, and investors, ultimately driving sustainable growth.
Conclusion
Despite facing challenges in the current market environment, Foot Locker remains focused on executing its strategic initiatives to drive profitability and deliver value to its stakeholders.
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