Foot Locker, Inc. (NYSE:FL) blamed Uncle Sam for its disappointing Q1 results. FL stock is getting punished this morning, down almost 12% in pre-market trading.
Revenue of $2 billion was lackluster, up only 0.5% from last year’s $1.99 billion, and below Wall Street forecasts of $2.02 billion. Q1 earnings per share of $1.36 missed estimates by two cents, and were below last year’s $1.39. Comp store sales increased 0.5%. Gross margins dropped to 34% of sales from 35% a year ago, and SG&A expenses increased 30 basis points to 18.5% of sales.
“The slow start we experienced in February, which we believe was largely due to the delay in income tax refunds, was unfortunately not fully offset by much stronger sales in March and April,” said Richard Johnson, chairman and CEO. “We are confident that our customers have not lost their tremendous appetite for athletic footwear and apparel and that our position in the industry is stronger than ever.”
The Internal Revenue Service said this year it issued most tax refunds in less than 21 calendar days.
InvestorPlace contributor Hilary Kramer last month wrote that “plenty of retail chains aren’t posting any comparable sales growth, are closing stores, are watching earnings contract, and so on. Foot Locker isn’t one of those chains.” She noted FL’s diversified portfolio of stores and brands “that’s translated to rock-solid fundamentals for some time.”
During the first quarter, the global footwear retailer opened 30 new stores, remodeled or relocated 61 stores, and closed 39 stores. As of April 29, the Company operated 3,354 stores in 23 countries.
FL stock has been pretty much flat this year, down less than 1%.