Foot Locker Shares Drop 16% Despite Narrower-than-Expected Q2 Loss and Sales Beat

Foot Locker (NYSE:FL) reported a smaller-than-expected loss for the second quarter of 2024, with sales marginally exceeding expectations, though its shares tumbled over 16% intra-day.

The athletic footwear and apparel retailer posted an adjusted loss of $0.05 per share for the quarter, outperforming analyst forecasts, which had projected a loss of $0.08 per share. Revenue for the period rose by 1.9% year-over-year to $1.9 billion, narrowly surpassing the Street estimate of $1.89 billion.

Comparable sales showed a 2.6% increase, driven by a 5.2% growth in global Foot Locker and Kids Foot Locker stores. Additionally, the company's gross margin improved by 50 basis points year-over-year, landing between 29.5% and 29.7%.

Foot Locker's President and CEO, Mary Dillon, highlighted the success of their "Lace Up Plan," which she said is evident through the company's return to positive sales growth and margin expansion in the second quarter.

Looking ahead, Foot Locker reaffirmed its full-year 2024 adjusted earnings guidance, projecting an EPS range of $1.50 to $1.70. This outlook includes a $0.09 impact from a non-recurring charge related to the FLX Rewards Program. The company anticipates comparable sales growth of 1% to 3% for the entire year.

In addition to its financial results, Foot Locker revealed plans to streamline its global operations, including the closure of stores in South Korea, Denmark, Norway, and Sweden. The company also announced a relocation of its global headquarters to St. Petersburg, Florida, expected by late 2025, as part of its strategic realignment.