Foot Locker FL stock drops 25% Q1 earnings miss, lower guidance
A sign hangs above the entrance of a Foot Locker store on August 02, 2021 in Chicago, Illinois.
Foot Locker's stock plummeted more than 25% in premarket trading Friday after it reported dismal fiscal first-quarter results and reduced its outlook.
The footwear retailer missed on both the top and bottom lines and said it has had to increase markdowns to drive sales.
Here's how Foot Locker did in its first fiscal quarter compared with what Wall Street was anticipating, based on a survey of analysts by Refinitiv:
Earnings per share: 70 cents adjusted vs. 81 cents expected
Revenue: $1.93 billion vs. $1.99 billion expected
The company's reported net income for the three-month period that ended April 29 was $36 million, or 38 cents a share, compared with roughly $132 million, or $1.37 per share, a year earlier.
Sales dropped to $1.93 billion, down 11.4% from $2.18 billion a year earlier.
"Our sales have since softened meaningfully given the tough macroeconomic backdrop, causing us to reduce our guidance for the year as we take more aggressive markdowns to both drive demand and manage inventory," CEO Mary Dillon said in a statement.
The company now expects sales to be down 6.5% to 8% for the year, compared to a prior range of down 3.5% to 5.5%.
Bank of America analysts noted earnings results from retailers like Target , TJ Maxx and Walmart this week were better than expected, but 45% of the retail sector has yet to report earnings and the companies still to come aren't as high quality as the ones that reported this week.
Foot Locker's poor report could signal trouble ahead for other names in the retail sector, as a range of companies report earnings over the next few weeks.
This is breaking news. Please check back for updates.
Source: CNBC
