Foot Locker (FL) earnings Q4 2023

Shares of Foot Locker fell more than 20% on Wednesday after the sneaker retailer reported a holiday-quarter loss, issued weak guidance for the current year and said it’s behind on meeting its financial goals.

Given how poorly its past fiscal year went, the company is now expecting the profitability goal it laid out during its March 2023 investor day to be delayed by two years, Foot Locker’s finance chief Mike Baughn said. It now anticipates to reach an EBIT margin of 8.5% to 9% by 2028, said Baughn.

Here’s how the company did in its fiscal fourth quarter, compared with estimates from analysts surveyed by LSEG, formerly known as Refinitiv:

• Earnings per share: 38 cents adjusted vs. 32 cents expected
• Revenue: $2.38 billion vs. $2.28 billion expected

The company swung to a loss in the three-month period that ended Feb. 3. Foot Locker lost $389 million, or $4.13 per share, compared with income of $19 million, or 20 cents per share, a year earlier. Excluding one-time items, Foot Locker reported earnings of 38 cents per share.

Sales rose slightly to $2.38 billion, up about 2% from $2.34 billion a year earlier.

In the current fiscal year, Foot Locker is expecting profit to be worse than analysts had expected. It anticipates adjusted earnings per share will be between $1.50 and $1.70, compared with estimates of $1.40 to $2.30, according to LSEG.

For fiscal 2024, Foot Locker is expecting sales to be between down 1% and up 1%, compared with estimates of down half a percent, according to LSEG.

CEO Mary Dillon said in a statement that Foot Locker managed to drive full-price sales “in addition to compelling promotions” during its holiday quarter. But the retailer’s gross margin fell by 3.5 percentage points “primarily as a result of higher markdowns.” 

We “proactively reinvested in markdowns to end the year with leaner inventory levels compared to our expectations,” said Dillon. “As we continue evolving into a modern, omnichannel retailer for ‘all things sneakers,’ we are making…