Specialty sports retailer Foot Locker Inc. (NYSE: FL) reported a decline in FY23 first-quarter sales of 11.4% year-over-year to $1.93 billion, below the consensus analyst estimate of $1.99 billion.
Adjusted EPS of $0.70 missed the analyst consensus of $0.81.
Comparable store sales decreased 9.1% compared to last year.
Gross margin contracted 400 basis points, driven by a combination of higher writedowns compared to prior year historically low levels and occupancy deleveraging, as well as an increase in theft-related losses.
Selling, general and administrative expenses fell 6.9% year-over-year to $431 million.
Operating margin was 3.2% and operating income for the quarter decreased 72% to $61 million.
The company had $313 million in cash and equivalents as of April 29, 2023. Merchandise inventories were $1.76 billion, up 25% year-over-year.
The Board of Directors declared a quarterly cash dividend on the Company’s common shares of $0.40 per share, payable on July 28, 2023, to shareholders of record on July 14, 2023.
Foot Locker announced the appointment of Mike Baughn as Executive Vice President and Chief Financial Officer effective June 12, 2023.
“However, our sales have since weakened significantly given the difficult macroeconomic backdrop, which has led us to lower our guidance for the year as we take more aggressive downgrades to both drive demand and manage inventory,” it said. Executive Director Mary Dillon.
Panorama: shoe drawer reduces FY23 comparable sales guidance from 3.5% – 5.5% to 7.5% – 9% less.
It also lowered FY23 sales guidance from 3..55% – 5.5% up to 6.5% – 8%.
FL lowered FY23 gross margin guidance from 30.8% – 31% to 28.6% – 28.8% citing more aggressive downgrades and further shrinkage.
It lowered the FY23 adjusted EPS outlook from $3.35 – $3.65 to $2.00 – $2.25, versus consensus of $3.45.
Price Action: FL shares are trading down 23.0% at $31.98 before trading late on Friday.
Photo via Wikimedia Commons
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This article Foot Locker shares plunge due to weak first-quarter earnings: Here’s why it originally appeared on Benzinga.com
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