{"id":13881,"date":"2023-08-23T11:31:27","date_gmt":"2023-08-23T11:31:27","guid":{"rendered":"https:\/\/isafespend.com\/news\/foot-locker-shares-plunge-30-as-it-slashes-guidance-and-blames-consumer-softness\/"},"modified":"2023-08-23T11:31:28","modified_gmt":"2023-08-23T11:31:28","slug":"foot-locker-shares-plunge-30-as-it-slashes-guidance-and-blames-consumer-softness","status":"publish","type":"post","link":"https:\/\/isafespend.com\/?p=13881","title":{"rendered":"Foot Locker shares plunge 30% as it slashes guidance and blames &#8216;consumer softness&#8217;"},"content":{"rendered":"<div id=\"RegularArticle-ArticleBody-5\" data-module=\"ArticleBody\" data-test=\"articleBody-2\" data-analytics=\"RegularArticle-articleBody-5-2\"><span class=\"HighlightShare-hidden\" style=\"top:0;left:0\"><\/span><\/p>\n<div class=\"group\">\n<p><span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-1\">Foot Locker<span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> reported another quarter of falling sales and slashed its outlook for the second time this year on Wednesday as inflation-weary consumers think twice before shelling out for footwear and apparel.\u00a0<\/p>\n<p>The sneaker giant&#8217;s adjusted fiscal second-quarter earnings were in line with Wall Street&#8217;s expectations, but fell short of analysts estimates on sales and saw another quarter of slimmer margins due to promotions and higher shrink.\u00a0<\/p>\n<p>Shares plunged 30% in premarket trading.<\/p>\n<p>Here&#8217;s how Foot Locker did in the three-month period that ended July 29 compared with what Wall Street was anticipating, based on a survey of analysts by Refinitiv:<\/p>\n<ul>\n<li>Earnings per share: 4 cents adjusted vs. 4 cents expected<\/li>\n<li>Revenue: $1.86 billion vs. $1.88 billion expected<\/li>\n<\/ul>\n<p>The company swung to a loss of $5 million, or 5 cents per share, compared to a profit of $94 million, or 99 cents a share, a year earlier. Excluding one-time items, the company reported earnings of 4 cents per share.\u00a0<\/p>\n<p>Sales declined to $1.86 billion, down 9.9% from $2.07 billion a year earlier.\u00a0<\/p>\n<p>The dismal quarter prompted Foot Locker to lower its forecast again \u2013 just five months after introducing it. The company also paused its quarterly cash dividend beyond its board&#8217;s recently-approved October payout of 40 cents per share.<\/p>\n<p>The athletic apparel retailer now expects sales to drop 8% to 9% for the year, compared to a previously issued forecast of down 6.5% to 8%. It is projecting a drop in same store sales of 9% to 10%, compared to its previous guidance of down 7.5% to 9%.\u00a0<\/p>\n<p>The company cut its adjusted earnings guidance to $1.30 to $1.50 per share, down from $2.00 to $2.25 a share.\u00a0\u00a0<\/p>\n<p>&#8220;We did see a softening in trends in July and are adjusting our 2023 outlook to allow us to best compete for price-sensitive consumers, while still leaning into the strategic investments that drive our Lace Up plan,&#8221; CEO Mary Dillon said in a news release.\u00a0<\/p>\n<p>For the last two quarters, Foot Locker has been forced to rely on promotions to drive sales because its primary customer, which skews lower to middle-income, has pulled back on spending for discretionary goods like shoes and clothes.\u00a0<\/p>\n<p>Those heavy markdowns have weighed on Foot Locker&#8217;s margins, which dropped 4.6 percentage points compared to the year-ago period.\u00a0<\/p>\n<p>Shrink, a retail industry term that refers to merchandise lost by theft, damage or other means, also weighed on profits, Foot Locker said. It didn&#8217;t disclose how much shrink cut into its margins compared to promotions.\u00a0<\/p>\n<p>Comparable-store sales dropped by 9.4% during the quarter, which the retailer attributed to &#8220;ongoing consumer softness&#8221; and changes to its vendor mix. It&#8217;s unclear which vendors, or athletic apparel brands, are changing. But Foot Locker has been trying to reduce its reliance on <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-3\">Nike<span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> and balance its vendor mix.<\/p>\n<p>Nike, which has long been the largest driver of sales at Foot Locker, has been in the midst of its own strategy shift towards a direct-to-consumer model and has been pulling back from wholesalers for several years.\u00a0<\/p>\n<p>Foot Locker&#8217;s inventories are still high \u2013 they rose 11% year over year to $1.8 billion \u2013 but levels have sequentially improved compared to the first quarter of 2023, the company said.<\/p>\n<\/div>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.cnbc.com\/2023\/08\/23\/foot-locker-fl-earnings-q2-2023-.html\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Foot Locker reported another quarter of falling sales and slashed its outlook for the second time this year on Wednesday as inflation-weary consumers think twice before shelling out for footwear and apparel.\u00a0 The sneaker giant&#8217;s adjusted fiscal second-quarter earnings were in line with Wall Street&#8217;s expectations, but fell short of analysts estimates on sales and<\/p>\n","protected":false},"author":1,"featured_media":13882,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[43],"tags":[],"class_list":{"0":"post-13881","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-news"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.12 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Foot Locker shares plunge 30% as it slashes guidance and blames &#039;consumer softness&#039; | iSafeSpend<\/title>\n<meta name=\"description\" content=\"Foot Locker reported another quarter of falling sales and slashed its outlook for the second time this year on Wednesday as inflation-weary consumers\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/isafespend.com\/?p=13881\" \/>\n<meta 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