Foot Locker posts earnings beat, but narrows annual forecast

November 29, 2023 6:59 AM EST
(Updated - November 29, 2023 7:51 AM EST) -- Foot Locker (NYSE: FL) has reported better than expected earnings and a shallower than anticipated slide in sales in the third quarter, although the athletic apparel retailer narrowed its full-year earnings guidance due to "consumer uncertainty."

The business, known for its mall locations manned by employees wearing striped uniforms resembling referees, reported adjusted income per share of $0.30 in the three months ended on Oct. 28, topping Bloomberg consensus estimates of $0.22.

Comparable sales, meanwhile, dropped by 8%, as Foot Locker was hit by soft demand and weakness at its Champs Sports division. Analysts had forecast a decline of 9.88%.

Shares in the New York-based company jumped in premarket trading on Wednesday.

In a statement, Chief Executive Mary Dillon called results "strong" over the Thanksgiving week, which included the key Black Friday sales event. However, she noted that the firm is facing "ongoing consumer uncertainty," reflecting recent concerns from retailers that shoppers may rein in expenditures this holiday season as they grapple with high inflation and elevated interest rates.

With this operating environment in mind, Foot Locker said it now expects to deliver annual adjusted earnings per share of $1.30-$1.40, narrowing its previous range of $1.30-$1.50. Dillon added that the group projects flat to slightly lower inventory levels at the end of the year.

"We look forward to rounding out our reset year and building on our progress in 2024 and beyond, and we are confident we are on the right path to delivering longer-term shareholder value," Dillon said.

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