Skip to content
Trending
June 30, 2025​Here’s how the luxury real estate market is splitting up July 5, 2025U.S. payrolls increased by 147,000 in June, more than expected June 30, 2025Bulgaria is set to join the euro zone. But its citizens aren’t convinced July 5, 2025Trump ‘big beautiful bill’ gives top 1% biggest tax cuts in these states June 30, 2025Bank investors bet on looser regulation under Trump. They are starting to see it July 5, 2025Some international LGBTQ+ travelers pull back on U.S. trips: ‘Why would I go there?’ July 3, 2025Trump’s deportations are hurting Constellation Brands’ beer sales July 3, 2025UK’s popular sausage roll seller plunges 15% as heatwave hurts sales July 2, 2025Inflation fears receded in May as Trump eased some tariff threats, New York Fed survey shows July 5, 2025Airlines face investors after strong— but cheaper — July 4 holiday
EverydayRead
  • HOME
  • Business
  • Earnings
  • Economy
  • Finance
  • Lifestyle
EverydayRead
EverydayRead
  • HOME
  • Business
  • Earnings
  • Economy
  • Finance
  • Lifestyle
EverydayRead
  Earnings  Foot Locker shares tumble as it issues gloomy holiday outlook, sees ‘softness’ at Nike
Earnings

Foot Locker shares tumble as it issues gloomy holiday outlook, sees ‘softness’ at Nike

AdminAdmin—December 9, 20240

Foot Locker store location on 34th street in New York City.

Courtesy: Foot Locker

Foot Locker slashed its full-year guidance Wednesday after reporting a rough set of quarterly results that could be a warning sign for its largest brand partner Nike.

The sneaker giant fell short of Wall Street’s expectations on the top and bottom lines and blamed the miss on soft consumer demand and elevated promotions across the marketplace. The company also saw “softness” at Nike, CEO Mary Dillon told CNBC in an interview. 

“There are definitely some brands that we’re seeing comp gains, and then, you know, we’re also contending with some more recent softness out of Nike,” said Dillon. “Given their size and scale, it kind of makes sense that it would have an impact.” 

Foot Locker shares closed about 8% lower.

Here’s how Foot Locker did in its fiscal third quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

  • Earnings per share: 33 cents adjusted vs. 41 cents expected
  • Revenue: $1.96 billion vs. $2.01 billion expected

In the three months ended Nov. 2, Foot Locker swung to a loss of $33 million, or 34 cents per share, compared with earnings of $28 million, or 30 cents per share, a year earlier. Excluding one-time items related to impairment charges for its atmos brand and other expenses, Foot Locker reported earnings of $31 million, or 33 cents per share. 

Sales dropped to $1.96 billion, down about 1.4% from $1.99 billion a year earlier. 

Dillon explained that consumers are showing up for key shopping moments, such as back-to-school and the recent stretch between Thanksgiving and Cyber Monday, but pulling back in between those events, making the peaks and valleys sharper than expected. Foot Locker is also dealing with slow demand for Nike, which is trying to turn around its business after relying too heavily on the same styles to drive sales. 

Nike veteran Elliott Hill took the helm of the company less than a month ago, and Wall Street has not yet heard his strategy. Given Foot Locker’s performance during its third quarter, Nike could post another set of less-than-stellar quarterly results when it reports on Dec. 19.

More stories

American Express CFO says spending picked up at year-end, thanks to millennials and Gen Z

January 25, 2025

Arm shares drop on weak forecast

May 8, 2025

Shares of DocuSign surge 14% on strong earnings, AI boost

March 16, 2025

Gap beats earnings and revenue estimates, hikes profit margin outlook as results are posted early

October 2, 2024

Nike is Foot Locker’s largest brand partner, accounting for about 60% of sales. If Nike is struggling, Foot Locker will inevitably suffer, too. 

“It’s not like across the board with all brands. Frankly … I would just say that there’s some that are more promotional, but in total, the category is pretty promotional,” said Dillon. “There’s an elevated promotional level in this category that we hadn’t forecasted to be as it is.” 

She reiterated that Foot Locker’s relationship with Nike and its new CEO is “very strong” and expects the slow demand to be a blip as Hill gets his footing. 

“We have a great relationship with him [and] feel very confident about where he and his team are going,” said Dillon. “I think we’re going to work through all that, that’s the thing.”

Rough guidance

Given the tough situation with Nike and the pressures facing Foot Locker’s lower-income consumer, the company slashed its guidance for the full year and issued a disappointing holiday forecast.

For the holiday quarter, Foot Locker expects sales to be down between 1.5% and 3.5%, compared with a gain of about 2% in the year-ago period. The company said the previous fiscal year had an additional sales week.

Foot Locker’s guidance range is mostly worse than the 1.6% decline that analysts had expected, according to LSEG. The company also anticipates comparable sales will rise between 1.5% and 3.5%, largely below expectations of 3.4% growth, according to StreetAccount. 

For the full year, Foot Locker now expects sales to fall between 1% and 1.5%, compared with previous guidance of down 1% to up 1%. Analysts were expecting a decline of 0.4%, according to LSEG.

The retailer also cut its comparable sales outlook for the full year and now anticipates comps will grow between 1% and 1.5%, compared with previous guidance of 1% to 3%. Analysts expected the metric would climb 1.8%, according to StreetAccount. 

Foot Locker also lowered its full-year earnings outlook and now expects adjusted earnings per share to be between $1.20 and $1.30, below Wall Street expectations of $1.54. Foot Locker previously expected earnings to be between $1.50 and $1.70 per share. 

The company attributed the revised guidance, in part, to elevated promotions and the shorter year, which is expected to impact sales by about $100 million. 

Despite the slashed guidance and gloomy holiday outlook, there were some bright spots during the period. For the second quarter in a row, Foot Locker’s comparable sales grew compared with the previous year, with a 2.4% increase. That’s below the 3.2% analysts expected, according to StreetAccount, but it’s one indicator that Dillon’s turnaround plan is continuing to show signs of life.

Champs, which has been dragging down Foot Locker’s overall business, also posted positive comparable sales at 2.8% growth, as did WSS, which saw an increase of 1.8%.

During the quarter, Foot Locker’s gross margin also improved by 2.3 percentage points, thanks to fewer promotions than during the year-ago period, and it saw the highest conversion it has all year, said Dillon. 

The former Ulta Beauty boss added the company is planning to continue to use its cash on hand to finance its store refurbishment programs and is feeling “really good” about the progress it’s made.

“It is a bit of a tale of two worlds, which is that we feel like what we’re doing is really working well, but in the marketplace that we’re seeing right now, we think this is the right call,” said Dillon of the decision to cut guidance. “It doesn’t shake our confidence in where we’re heading with the Lace Up Plan and it doesn’t shake our confidence that these are the right things to do.”

Don’t miss these insights from CNBC PRO

CFPB sues Comerica Bank, alleging it failed to administer federal benefits program
Unemployment rate jumps more than a percentage point for Black women in November
Related posts
  • Related posts
  • More from author
Earnings

Airlines face investors after strong— but cheaper — July 4 holiday

July 5, 20250
Earnings

UK’s popular sausage roll seller plunges 15% as heatwave hurts sales

July 3, 20250
Earnings

Drone maker AeroVironment shares pop 21% on earnings beat

July 2, 20250
Load more
Read also
Finance

Trump ‘big beautiful bill’ gives top 1% biggest tax cuts in these states

July 5, 20250
Economy

U.S. payrolls increased by 147,000 in June, more than expected

July 5, 20250
Earnings

Airlines face investors after strong— but cheaper — July 4 holiday

July 5, 20250
Business

Some international LGBTQ+ travelers pull back on U.S. trips: ‘Why would I go there?’

July 5, 20250
Finance

Slam dunk? Fundstrat’s Tom Lee considers two new themes for his Granny Shots ETF

July 4, 20250
Economy

Here’s where the jobs are for June 2025 — government sector leads the way

July 4, 20250
Load more
© 2023, All Rights Reserved.
  • About Us
  • Advertise With Us
  • Contact Us
  • Disclaimer
  • Cookie Law
  • Privacy Policy
  • Terms & Conditions