Citi analysts lower Foot Locker rating to neutral

Investing.com -- Foot Locker 's (NYSE: FL) decision to lower its full-year guidance does not fully remove risk from the stock, analysts at Citi said in a note downgrading its rating of the company to Neutral from Buy.

The move reverses an earlier upgrade of Foot Locker by Citi in March. The analysts said that they failed to gauge several factors surrounding Foot Locker's performance, including the "economic sensitivity" of the group's consumer base to wider inflationary pressures and "how unhealthy the athletic market is in the U.S."

Shares in Foot Locker dipped in early trading on Monday, extending a steep decline of more than 27% on Friday.

The New York-based company, known for its footwear stores manned by employees in striped uniforms, said it expects comparable store sales to slip by 7.5% to 9.0% in the 53 weeks ending on February 3, 2024, citing "softer sales through the balance of the year." Its prior outlook had estimated that the figure would drop by 3.5% to 5.5%.

Annual earnings per share was also projected to be in range of $2.00 to $2.25, down from the prior guidance of $3.35 to $3.65.

President and Chief Executive Officer Mary Dillon added that sales weakened "meaningfully" in its first quarter due to difficult macroeconomic conditions.

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