Foot Locker Stock Slides on Weak Q3 Results: Retail Sees Weak Demand as Key Issue
By Stocktwits Inc | First Published Dec 4, 2024, 10:10 PM ISTThe company lowered its full-year sales guidance for non-GAAP EPS outlook.
Shares of footwear and apparel retailer Foot Locker Inc. ($FL) fell more than 11% on Wednesday morning after the company missed Wall Street expectations for its third-quarter earnings, damping retail sentiment.
The company posted earnings per share of $0.33, below $0.40 as Wall Street analysts expected. Its revenues came in at $1.96 billion, versus the expected $2.01 billion, according to Stocktwits data.
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Softer consumer spending following the back-to-school season was responsible for the weaker-than-expected bottom line, the company said in a statement.
Foot Locker also lowered its full-year sales guidance for non-GAAP EPS outlook. It now expects a sales decline between -1.5% and -1.0%, compared to the earlier range of -1% to +1%.
Its non-GAAP EPS is projected at $1.20 to $1.30 compared to the earlier stated range of $1.50 and $1.70. Fourth quarter EPS is expected to fall between $0.70 to $0.80, the company added.
For the third quarter, comparable sales grew 2.4% including global Foot Locker and Kids Foot Locker divisions where comparable sales grew by 2.8%.
"Our team's continued focus on execution drove positive comparable sales trends and meaningful gross margin expansion in the quarter. However, our third quarter top- and bottom-line performance fell short of our expectations,” Mary Dillon, president and CEO said in a statement.
Retail sentiment on the stock fell to ‘extremely bearish’ (24/100) from ‘neutral’ (51/100) a week ago. Message volumes rose to the ‘extremely high’ zone from normal.
Dillon noted the company’s continued progress with its “Lace Up” Plan. The plan has been part of Foot Locker’s efforts to simplify its business model and focus on core banners and regions.
During the third quarter, the company opened 10 new stores and closed 24 stores.
In August, the company announced it will move its global headquarters to St. Petersburg, Florida in late 2025. It plans to maintain “only a limited presence” in New York City going forward, it said in an earlier release, in addition to a slew of other measures it said were part of its “Lace Up” plan.
According to retail investors polled on Stocktwits, the company’s biggest issue going forward is weak consumer demand.
Foot Locker stock is down 30.22% year-to-date.
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