Foot Locker's shares experienced a significant drop, falling as much as 36% to a 13-year low on August 23, 2023. The sportswear retailer's stock closed 28% lower at $16.69, marking its worst day since February 2022 and bringing its year-to-date loss to nearly 56%. This plunge was triggered by Foot Locker's warning of frail consumer demand amidst persistent high inflation, leading the company to cut its full-year forecast and suspend its dividend.
The company now anticipates earnings per share (excluding some items) to be in the range of $1.30 to $1.50 for the year, a significant reduction from its previous guidance of $2.00 to $2.25. Furthermore, Foot Locker projects revenue declines to worsen to as much as 9%. The retailer observed a low double-digit decline in comparable sales in July, attributing this to higher borrowing costs and rentals impacting its lower-income customer base.
While the provided FT article headline references an original article, the content found through the search specifically details the August 23, 2023, event where Foot Locker's shares plummeted and it revised its outlook. Later updates from December 2024 further indicate continued struggles with consumer spending. For instance, Foot Locker cut its fiscal 2024 adjusted EPS guidance to $1.20-$1.30, down from a prior $1.50-$1.70, and revised sales growth outlook to a 1.5% to 1.0% decline for the fiscal year, or $8.032 billion-$8.072 billion. The company reported a loss of $33 million, or 34 cents per share, for the three months ending November 2, down from $28 million in the same period last year, with total sales slipping 1.4% to $1.96 billion. CEO Mary Dillon cited softening consumer spending trends post-Back-to-School period and a more promotional environment as key factors, although a positive acceleration in spending was noted during Thanksgiving week in stores.
