January 26, 2021

Foot Locker Earnings May be the First Big Sign Athletic Momentum Is Weaning

Investors are punishing Foot Locker Inc. shares today — as of 9:50 a.m. ET, the stock remained down nearly 25 percent, to $35.87 — after the athletic giant reported disappointing second-quarter results.
Foot Locker — which had previously evidenced some immunity to retail industry softness — said its sales fell 4.4 percent during the period, to $1.7 billion, missing Wall Street’s consensus for sales of $1.8 billion. Comparable sales also declined 6 percent.
Profits took an even great tumble — declining 60 percent year-over-year, to $51 million, or 39 cents per diluted share. On an adjusted basis profits were 62 cents per share — a significant miss against analysts’ forecasts for earnings per share of 90 cents.
For the past two-plus years Foot Locker has successfully reaped the benefits of strong athletic trends but chairman, CEO and president Dick Johnson suggested that sneaker momentum has been weaning in recent months.
“While we believe our position in the market for premium sneakers remains very strong and our customers continue to look to us for compelling new athletic footwear and apparel styles, sales of some recent top styles fell well short of our expectations and impacted this quarter’s results,” Johnson said. “At the same time, we

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