Foot Locker Source: Peter Dazeley / Getty
Foot Locker stock took a 30% drop after its Q2 earnings call revealed slow sales which the retailer blamed on “Ongoing consumer softness”.
This month all the big box retailers will be dishing out their Q2 earning reports to their investors. Perhaps, we might need to check on the Foot Locker investors because their news was far from positive. Q2 earnings revealed the retailer’s sales had decreased by 9.9% to $1.8M compared to 2022 which had a strong $2.1M in Q2. According to Complex, Foot Locker’s CEO had what they thought was a good excuse for the numbers and blamed consumers.
“Our second quarter was broadly in line with our expectations, despite the still-tough consumer backdrop,” explained CEO of Foot Locker Mary Dillon. “However, we did see a softening in trends in July and are adjusting our 2023 outlook to allow us to best compete for price-sensitive consumers, while still leaning into the strategic investments that drive our Lace Up plan. Importantly, we are continuing to make progress on our inventory levels and look to best position the business for the upcoming holiday season and into 2024.”
Additionally, the company announced it will suspend its usual dividend payout for stockholders. As expected the stock market reaction was swift and the stock tumbled 30% instantly. Ideally, the retailer could turn things around but after trashing the consumers the battle will be even more difficult. Earlier this year the retailer revealed it would not welcome Kanye West’s Yeezy sneakers back into its stores, unlike its competitors. In retrospect perhaps that was the wrong decision given the recent news. Those revenue dollars certainly would have helped and brought more traffic to the website. This holiday season will be more important than ever for Foot Locker. May the odds be in their favor.
