Foot Locker has reported a 2.6% increase in comparable sales for the fiscal second quarter, marking its first growth in six quarters. This rise exceeded analysts’ expectations and indicates that the company’s efforts to revitalize its stores and enhance customer experience are paying off. Despite this positive news, Foot Locker’s stock fell approximately 8% in premarket trading.
CEO Mary Dillon highlighted the success of the “Lace Up Plan,” Foot Locker’s turnaround strategy, noting improved top-line trends and a solid start to the Back-to-School season. The company also saw its gross margin expand for the first time in over two years.
Foot Locker’s fiscal performance included a loss of $12 million, or 13 cents per share, compared to a loss of $5 million, or 5 cents per share, in the same period last year. Adjusted for one-time items, the loss was 5 cents per share, better than the expected 7 cents. Revenue reached $1.90 billion, surpassing the anticipated $1.89 billion.
For the remainder of the fiscal year, Foot Locker has maintained its sales guidance, expecting a range of 1% decline to 1% growth, outperforming the anticipated 0.4% decline. The company also retained its adjusted earnings per share forecast, projecting earnings between $1.50 and $1.70, ahead of the expected $1.54.
Under Dillon’s leadership, Foot Locker is focusing on transforming its store network, with plans to invest $275 million this year to remodel two-thirds of its stores by the end of fiscal 2025. The company is also closing or transferring operations of 30 stores in the Asia-Pacific region and 629 in Europe, while expanding its reach in Greece and Romania.
Foot Locker’s Champs Sports banner is showing signs of recovery, with comparable sales down 3.9%, a significant improvement from the 25.3% decline seen last year. The company is also relocating its global headquarters from New York City to St. Petersburg, Florida, by late 2025, aiming to enhance collaboration and reduce costs.
Despite broader retail industry challenges and consistent inflation, Foot Locker’s strategies are driving sales growth and customer engagement. Dillon remains confident in the company’s approach to ensure long-term profitable growth and shareholder value.