Foot Locker slashed its outlook for the second straight quarter and pauses its dividend as the shoe retailer grapples with a tough consumer backdrop.
Foot Locker stock plunged on Wednesday as investors kicked around a bevy of bad news. The shoe and sportswear retailer missed expectations for second-quarter sales, slashed its full-year outlook again, and paused its dividend.
Foot Locker reported earnings of 4 cents a share on revenue of $1.86 billion in the quarter ended July 29. While per-share profit was in line with the analysts’ expectations, sales missed estimates of $1.88 billion. Even worse, the retailer cut its fiscal-year sales and earnings outlook yet again—after lowering its guidance following earnings in May—and has halted its dividend. The stock plunged 28% in premarket trading. The news looks to be hitting shares in Nike , too, with that stock down 3% in the premarket.
Foot Locker now sees fiscal-year sales down 8% to 9% annually, even lower than its previous guidance of a 6.5% to 8% decline, while the company expects earnings per share at $1.30 to $1.50, down from prior outlook of $2.00 to $2.25. The company also suspended its quarterly cash dividends beyond an already-approved October payout.
“Our second quarter was broadly in line with our expectations, despite the still-tough consumer backdrop. However, we did see a softening in trends in July and are adjusting our 2023 outlook to allow us to best compete for price-sensitive consumers,” May Dillon, Foot Locker’s CEO, said in a statement. “We intend to update the market on our go-forward capital allocation plans and the timing around our longer-term financial targets when we report fourth quarter results.
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