The firm’s sales were down by 1.4% year-over-year and is now guiding for a loss of 1% to 1.5%
Shares of sneaker and athletic wear retailer Foot Locker (NYSE:FL) cratered 19% early Wednesday morning after the company reported third-quarter fiscal 2024 sales and adjusted EPS that fell short of Wall Street’s expectations.
In addition, Foot Locker downward-revised its full-year sales outlook, stoking fears that the footwear purveyor might not wrap up fiscal 2024 on a strong note.
However, the firm’s Q3-FY2024 revenue wasn’t far from analysts’ consensus estimate. Specifically, Foot Locker’s Q3 sales came in at $1.958 billion, down 1.4% year over year and slightly below Wall Street’s call for $2 billion.
Not only that, but Foot Locker’s comparable (same-store) sales increased 2.4% year over year. This represents a marked improvement compared to Foot Locker’s year-on-year comparable sales decrease of 8% in the year-earlier quarter.
On the other hand, Foot Locker’s bottom-line results disappointed investors. The retailer reported third-quarter fiscal 2024 adjusted (non-GAAP) earnings of $0.33 per share, a moderate improvement over the year-earlier quarter’s result of $0.30 per share but also a wide miss compared to the analysts’ consensus forecast of $0.40 per share.
Making matters worse for Foot Locker’s jittery stockholders, the company downward-adjusted its financial outlook for the full year of fiscal 2024, which ends on February 1, 2025.
Regarding sales change, Foot Locker now guides for a loss of 1% to 1.5%. Previously, the company’s guidance range called for a loss of 1% to a gain of 1%.
Moreover, Foot Locker reduced its full-year adjusted EPS outlook from $1.50 to $1.70 previously to $1.20 to $1.30 currently. With that, Foot Locker’s management will have a tough time convincing investors that consumers are active and that the company will finish fiscal 2024 on a strong note.
Foot Locker CEO Mary Dillon tried to quell investors’ concerns about the holiday season. “We saw a meaningful and positive acceleration over the key Thanksgiving week period, especially in stores,” he said.
At the same time, Dillon acknowledged Foot Locker’s full-year outlook reduction, citing “a more promotional environment and softer consumer demand outside of key selling periods”.
Foot Locker may have an opportunity to win back the favor of its shareholders if the company delivers strong December holiday sales results – but then, there’s no guarantee that this will happen.
