Foot Locker stock reverses early losses as it unveils plan to expand sneaker line and relaunch core brand
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Foot Locker Inc. stock reversed premarket losses early Monday, after the sporting goods retailer’s stronger-than-expected fourth quarter weighed against weaker-than-expected guidance for the current year.
The stock
FL,
was last up 1.5% ahead of Monday’s open, after earlier falling more than 3%.
The New York-based company posted net income of $19 million, or 20 cents a share, for the fiscal quarter to Jan. 28, down from $103 million, or $1.02 a share, in the year-earlier period. Adjusted per-share earnings came to 97 cents, well ahead of the 51 cent FactSet consensus.
Sales fell 0.3% to $2.334 billion from $2.341 billion a year ago, also ahead of the $2.146 billion FactSet consensus. Same-store sales rose 4.2%, while FactSet expected a decline of 6.7%.
Same-store sales were boosted by increased traffic and improved access to fresh inventory, which lifted sales across brands and regions.
“Our team delivered a great finish to the year with strong fourth-quarter results that capitalized on resilient Holiday demand and a compelling assortment and inventory position from our brand partners,” Chief Executive Mary Dillon said in a statement.
The company is planning to simplify its operations in 2023 and invest in core businesses, she added, a plan that it will outline later Monday at an Investor Day.
The company now expects fiscal 2023 same-store sales to fall 3.5% to 5.5% and for adjusted EPS to range from $3.35 to $3.65. The FactSet consensus is for same-store sales to fall 1.5% and for EPS of $4.11.
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The company is also planning to overhaul its Asia operations, closing stores and e-commerce in Hong Kong and Macau. It plans to convert its current owned and operated stores and e-commerce in Singapore and Malaysia to a license model, to continue to operates its stores in South Korea and to pursue growth in Asia via license partners.
The company’s Investor Day will detail its new “Lace Up” plan, which is designed to propel the company into its next phase, by expanding sneaker culture as a core move.
The company is planning to create “more distinction among banners,” by relaunching its Foot Locker brand, overhauling its real estate with new formats, shifting out of malls and closing underperforming stores.
To reset its relationship with customers, it will also upgrade its loyalty program and improve its analytical capabilities. Finally, it plans to improve its omnichannel and e-commerce offering.
The company is targeting sales growth of 5% to 6% for fiscal 2024 through 2026. It expects same-store sales to grow 3% to 4% over the period, while adjusted EPS is expected to grow in the low to mid-20s.
The stock has gained 31% in the last 12 months, while the S&P 500
SPX,
has fallen 12%.
See also: Nike stock drops 10% as execs predict cheaper clothing for at least the rest of the year
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