Foot Locker (NYSE:FL) stock is down 30% on Wednesday after the sneaker retailer posted notably weak financial results for its fiscal fourth quarter. Indeed, Foot Locker reported worse-than-expected earnings and issued bleak guidance for 2024 as it attempts to catch up to its financial goals.
What do you need to know about Foot Locker lately?
Well, the company reported EPS of 38 cents compared to 32 cents expected. Foot Locker also saw revenue of $2.38 billion compared to $2.28 billion expected.
The real issue, however, lies in the company’s net loss of $389 million for the quarter ended Feb. 3. This is a stark reversal from the company’s $19 million profit reported just a year ago.
Foot Locker expects profits will be weaker than projected this year. It anticipates adjusted EPS between $1.50 and $1.70 per share in 2024, worse than estimates for between $1.40 and $2.30.
“As we continue evolving into a modern, omnichannel retailer for ‘all things sneakers,’ we are making important progress strengthening our brand partnerships, increasing customer engagement, transforming our real estate footprint, and driving growth in digital,” said Foot Locker CEO Mary Dillon.
FL Stock Continues Decline as Profitability Target Retreats
Given the company’s fiscal weakness in the past year, Foot Locker now expects its profitability goal mentioned during its March 2023 investor day to be “delayed by two years.” The firm now predicts that it will achieve an adjusted earnings margin of between 8.5% and 9% by 2028, according to Foot Locker Chief Financial Officer Mike Baughn.
After today’s losses, FL stock is down by about 44% for the past 12 months.
Still, looking ahead, Dillon remains optimistic about the company’s partnership with Nike (NYSE:NKE) and Jordan Brand.
“It’s important to note our relationship our partnership with Nike is strong,” the CEO told analysts. “The areas that we really align around are our basketball, kids and sneaker culture, especially with the fact that we have a younger, multicultural consumer that we bring to the party and so, you know, a perfect example of how we’re working together is the activation we just did with them.”
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
