Foot Locker FL inventory falls 25% within the first quarter, missed earnings and decrease steerage

A sign hangs over the entrance of a Foot Locker store in Chicago, Illinois on August 2, 2021.

Scott Olson | Getty Images

Foot Lockers The stock fell more than 25% in premarket trading on Friday after the company announced dismal first-quarter results and lowered its outlook.

The shoe retailer missed both sales and profits and said it needed to increase discounts to boost sales.

Here’s how Foot Locker compared to Wall Street expectations for the fiscal first quarter, based on a Refinitiv analyst poll:

• Earnings per share: 70 cents adjusted vs. 81 cents expected
• Revenue: $1.93 billion versus $1.99 billion expected

The company’s reported net income for the three-month period ended April 29 was $36 million, or 38 cents per share, compared to about $132 million, or $1.37 per share, a year ago.

Revenue fell to $1.93 billion, down 11.4% from $2.18 billion a year earlier.

“Our sales have since declined significantly given the challenging macro environment, leading us to lower our guidance for the year as we take more aggressive discounts to both stimulate demand and manage inventory,” said CEO Mary Dillon in a statement.

The company now expects revenue to decline by 6.5% to 8% for the year, compared to a 3.5% to 5.5% decline last year.

Bank of America analysts presented the earnings results of retailers such as Goal, TJ Maxx And Walmart This week has been better than expected but 45% of the retail sector is yet to report earnings and the companies to come are not as good quality as those reporting this week.

Foot Locker’s poor report could indicate trouble for other names in the retail sector as a number of companies report earnings over the next few weeks.

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