Foot locker The change is starting to yield some results.
According to StreetAccount, the sneaker giant saw comparable sales fall 1.8% in its fiscal first quarter, much better than the 3.1% decline analysts expected. .
LSEG also reaffirmed its guidance for the fiscal year, which expected sales to fall between 1% and rise 1%, compared with the 0.6% decline analysts had forecast. , according to LSEG.
Here’s how the company did compared to what Wall Street predicted, based on LSEG’s survey of analysts:
- Earnings per share: 22 cents revised from 12 cents expected
- Revenue: $1.88 billion vs. $1.88 billion expected
Foot Locker’s reported net income for the three-month period ended May 4 was $8 million, or 9 cents per share, compared with $36 million, or 38 cents per share, a year ago. before. Adjusting for one-time items, including losses related to certain store closings and restructurings, and other costs, Foot Locker reported earnings of 22 cents per share.
Revenue fell to $1.88 billion, down about 3% from $1.93 billion a year earlier.
For the full year, Foot Locker expects adjusted earnings per share to be between $1.50 and $1.70, above estimates of $1.57, according to LSEG.
According to StreetAccount, it expects comparable sales growth of 1% to 3%, higher than the 1.5% growth analysts were expecting.
“We had a solid start to the year in the first quarter, which proves that our ‘Tightening Plan’ is working,” CEO Mary Dillon told CNBC in an interview. “The reason I feel confident is because we are rolling out an enhanced FLX rewards program so we have a lot of rewards opportunities. We are launching an improved mobile app that we I know is a great way to drive customer engagement and commerce and at the same time we see growth opportunities… with all of our brand partners throughout the year, including a return to growth with Nike during the holiday quarter.”
Dillon, former CEO of Ulta Beautyis working to turn Foot Locker around, but those efforts have taken longer than expected.
Sales have continued to decline as retailers compete with low-income consumers, who feel the burden of inflation more acutely than other shoppers, and erratic brand partners like Nikethis has reduced the number of new releases sent to Foot Locker stores.
Its Champs Sports banner also weighed on the overall business, with comparable sales down a staggering 13.4% in the quarter and total revenue down nearly 19%.
Foot Locker has relied on promotions to boost sales and has lost the confidence of Wall Street, with shares down about 28% year to date as of Wednesday’s close.
However, things are starting to turn in the company’s favor.
In April, Nike CEO John Donahoe admitted that The brand has gone too far as it ditched wholesalers in favor of its own stores and websites, and told CNBC it is “investing heavily in retail partners” as it rounds out its operations. own turnaround efforts.
While Foot Locker’s core consumer base remains under inflationary pressure, Dillon said the company’s average selling price increased during the quarter, demonstrating that consumers are willing to pay full price – for the right product.
“Our consumers… this is a very important category for them. So when people have discretionary income, it may be limited, but you’re going to prioritize spending on what, right?” Dillon said. “So they are prioritizing, but I would say spending with purpose.”
Dillon is also working to improve Foot Locker stores, where it still accounts for about 80% of its annual sales. She has built new, off-mall locations, closed underperforming stores, and refreshed existing locations so brands are ready to send out their best products and consumers. consumers are willing to choose Foot Locker over shopping directly with a brand – either Go meet your competitors alike Dick’s Sportswear.
In April, the retailer announced “store of the future” it completely changes the old Foot Locker format and will be used as a model for its store refresh.
“Instead of a wall of shoes, it’s actually a home for brands,” Dillon said. “And I think it’s going to come to life in a way that our brand partners are excited about. We’ve heard that from everyone.”
