Shares of American sportswear and footwear retailer fell as much as 12% after the company reported worse than expected sales for its last quarter.
The drop made it the worst trading day for the company in a year.
For the second quarter, Foot Locker revealed 75 cents for earnings per share, coming in five cents better than what analysts had expected. The company also reported that same-store sales had increased 0.5%. Analysts had been expecting an increase of 0.7%.
The company’s CFO, Lauren Peters said during the earnings call, “By month, comp sales in May increased low-single digits. June was down low-single digits and July picked back up to post a low-single digit gain. Our total reported sales increased 4.8%. The percent difference between our comp gain and the total sales increase was primarily due to the 53rd week sales shift impact. Additionally, the effects from foreign exchange rates increased sales by $15 million.
Traders became even more concerned about the number not getting any better for the third quarter.
“For the third quarter, we still expect comparable sales to be up low single-digits with Q4 strengthening further within that low single-digit range,” said Peters.
Chairman and CEO Dick Johnson remarked during the call, “Overall, the second quarter was in line with our expectations, as we posted a positive comp gain and grew earnings per share by 21%. This performance reflects the work we are doing on several fronts, so that we are well positioned to succeed in a rapidly evolving environment. Our customers are moving fast, our industry is adapting to get closer and faster to market and we are changing our business to not only keep up with the change, but to come out ahead of it.”
He added, “We are committed and focused as ever on connecting with our customers in cool, elevated ways. This includes exciting fresh product from our existing powerful vendor base and an ever evolving brand portfolio and unique in-store experiences, like gaming activation events. We are doing all of this in a manner that is meant to be both convenient and tailored to our customer shopping preferences, whether in-store or through one of our newly enhanced digital sites. As it’s likely no surprise to you, our customer is always on with their digital device and it is our mission to make sure that we remain relevant and top of mind with them 24/7. Suffices to say we remain bullish on our customer connected journey as we progress through 2018 and beyond.”
Recently Foot Locker was reiterated with an “outperform” rating along with a $63 target price at Wedbush.