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Foot Locker slashes its guidance for the year.
Scott Olson/Getty Images
Foot Locker
stock was falling sharply Friday after the shoe retailer reduced its guidance for the year as it struggles with sales declines.
Foot Locker
(ticker: FL) said it expects earnings for the fiscal year of between $2 to $2.25 a share, down from prior guidance of $3.35 to $3.65 a share. It now expects fiscal-year sales to decline 6.5% to 8%. The company previously expected sales to fall 3.5% to 5.5%.
“Our sales have since softened meaningfully given the tough macroeconomic backdrop, causing us to reduce our guidance for the year as we take more aggressive markdowns to both drive demand and manage inventory,” Chief Executive Mary Dillon said in a press release.
For the first quarter, the company reported earnings of 70 cents a share on revenue of $1.93 billion. Analysts surveyed by FactSet were expecting earnings of 76 cents a share on revenue of $1.99 billion.
Same-store sales dropped 9.1% in the quarter. Analysts were expecting a decline of 7.7%.
Retail earnings have provided insight into the current state of the U.S. buyer.
Foot Locker
isn’t the only consumer-facing company struggling with a sales slowdown. Target (TGT) warned of slower sales trends in its earnings report earlier this week.
Consistently high inflation, rising interest rates and fears of a recession have been impacting U.S. shoppers. The University of Michigan said last week that May’s preliminary index of consumer sentiment fell to the lowest reading since November 2022.
Shares of Foot Locker sank 20% in premarket trading Friday to $33. Coming into Friday trading, the stock has climbed 9.9% this year.
Write to Angela Palumbo at angela.palumbo@dowjones.com