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Foot Locker
inventory was falling sharply Friday after the shoe retailer diminished its steering for the yr because it struggles with gross sales declines. It additionally named a brand new chief monetary officer.
Foot Locker
(ticker: FL) mentioned it expects earnings for the fiscal yr of between $2 to $2.25 a share, down from prior steering of $3.35 to $3.65 a share and effectively beneath the $3.47 analysts had been modeling. It now expects fiscal-year gross sales to say no 6.5% to eight%. The corporate beforehand anticipated gross sales to fall 3.5% to five.5%.
“Our gross sales have since softened meaningfully given the robust macroeconomic backdrop, inflicting us to scale back our steering for the yr as we take extra aggressive markdowns to each drive demand and handle stock,” Chief Govt Mary Dillon mentioned in a press launch.
The massive step down in steering comes after consensus estimates already fell by greater than 16% over the previous three months. In different phrases, analysts had anticipated the yr can be harder than they initially modeled, however the firm’s forecast was nonetheless a lot decrease than anticipated.
For the primary quarter, the corporate reported earnings of 70 cents a share on income of $1.93 billion. Analysts surveyed by FactSet had been anticipating earnings of 76 cents a share on income of $1.99 billion.
Identical-store gross sales dropped 9.1% within the quarter. Analysts had been anticipating a decline of seven.7%.
The corporate additionally mentioned
Kohl’s
(KSS) veteran Mike Baughn would be part of as CFO, efficient subsequent month.
Foot Locker
was down 24% to $31.60 early Friday.
Retail earnings have offered perception into the well being of the U.S. client. Foot Locker isn’t the one retailer combating a gross sales slowdown.
Target
(TGT) warned of slower gross sales developments in its earnings report earlier this week.
Persistently excessive inflation, rising rates of interest and fears of a recession have been impacting U.S. buyers. The College of Michigan mentioned final week that Might’s preliminary index of client sentiment fell to the lowest reading since November 2022.
Together with Foot Locker, shares of athletic put on corporations
Nike
(NKE) and
Under Armour
(UAA) had been falling 4.7% and 4.5%, respectively. Each corporations promote their merchandise at Foot Locker places.
Baird analyst Jonathan Komp famous he wasn’t shocked that friends had been falling on Foot Locker’s outlook: “Whereas we suspect traders had been braced for weak spot, the replace a highlights the dangers of including publicity to cyclically delicate names in a more difficult retail setting.”
Coming into Friday buying and selling, Foot Locker shares had risen 9.9% this yr.
Write to Angela Palumbo at angela.palumbo@dowjones.com