Foot Locker, the American sportswear and footwear retailer, has reduced its guidance for the remainder of the year, two months after announcing a significant turnaround plan.
The announcement follows Foot Locker’s first fiscal quarter earnings that were worse than anticipated. Foot Locker announced quarterly sales of US $ 1.9 billion, a 11.4 per cent decrease from the same period last year. In contrast, its same-store sales decreased 9.1 per cent from the previous year. In contrast to an earlier estimate of 3.5 per cent to 5.5 per cent, Foot Locker now anticipates that sales would decline by 6.5 per cent to 8 per cent during the 2023 fiscal year.
The shop strategy of Foot Locker is currently undergoing a big revamp. It unveiled its “Lace Up” plan in March. This plan calls for the establishment of new shop formats, closing of about 400 underperforming sites, relaunching of its loyalty programme, and increased investment in digital. Foot Locker is making progress towards its goals—according to the earnings announcement, this past quarter saw the opening of 13 new shops, the remodelling or relocation of 18 stores, and the closure of 35 stores—but the business still has a lot of obstacles to overcome.
Foot Locker is coping with a number of challenges, including reduced tax refunds for lower-income consumers, a slowdown in consumer spending, and a transition away from items and towards services, according to CEO Mary Dillon in a teleconference. Additionally, she mentioned a number of company-specific challenges, including Foot Locker’s rekindled partnership with Nike, the closure of its East Bay location, and the repositioning of the Champs Sports brand.
“While trends did improve, they did not improve nearly to the extent we expected, and that weakness has continued into May,” Dillon said.
