Foot Locker sales decreased by 8.6 percent to 1,986 million dollars in the third quarter, while excluding the effect of foreign exchange rate fluctuations, total sales for the quarter decreased by 10 percent.
The company said in a release that comparable-store sales decreased by 8 percent, driven by ongoing consumer softness, changing vendor mix, and a 3 percent negative impact from the repositioning of Champs Sports. However, the retailer expects declining but better same-stores sales for the full year than it previously did.
The company also announced its entry into India in 2024 through long-term licensing agreements with Metro Brands Limited and Nykaa Fashion.
Commenting on the update, Mary Dillon, the company’s president and CEO, said: "We delivered third quarter results that were ahead of our expectations as strong execution and early progress against our Lace Up plan improved conversion trends across channels.”
Highlights of Foot Locker’s Q3 performance
The company gross margin declined by 470 basis points, net income was 28 million dollars compared to 96 million dollars in the corresponding prior-year period. On a Non-GAAP basis, net income was 28 million dollars compared with 121 million dollars in the corresponding prior-year period.
For the quarter, the company recorded earnings of 30 cents per share compared with 1.01 dollars per share in the third quarter of 2022, while non-GAAP earnings per share decreased to 30 cents per share compared with 1.27 dollars per share.
During the third quarter of 2023, the Company paid a quarterly dividend of 40 cents per share for a total of 38 million dollars.
The company opened 22 new stores, remodelled or relocated 36 stores and closed 14 stores during the quarter under review. As of October 28, 2023, the company operated 2,607 stores in 26 countries in North America, Europe, Asia, Australia, and New Zealand. In addition, 190 franchised stores were operating in the Middle East and Asia.
Foot Locker to enter India in 2024
Commenting on its India entry, the company further said, under the terms of the agreements, Metro Brands is granted exclusive rights to own and operate Foot Locker stores within the country and to sell authorised merchandise in Foot Locker stores.
Nykaa Fashion will be the exclusive ecommerce partner and will operate the Foot Locker India website as well as retail authorised merchandise on a Foot Locker branded shop on the Nykaa platform.
“These agreements will enable Foot Locker to efficiently access the large and growing sneaker market in India, consistent with the company's efforts to strategically pursue growth opportunities in new markets,” Foot Locker said.
Foot Locker adjusts sales and EPS outlook
For the full year, the company anticipates sales to decrease in the range of 8 to 8.5 percent compared to the prior outlook of decrease between 8 to 9 percent. Fourth quarter sales are expected to be down between 2 to 4 percent.
Comparable sales for the year are expected to decline between 8.5 to 9 percent versus prior estimate of decline between 9 and 10 percent, while fourth quarter comparable sales are expected to drop between 7 to 9 percent.
Non GAAP EPS in expected to be in the range of 1.30 dollars to 1.40 dollars for the whole year and between 26 cents to 36 cents for the fourth quarter.