{"id":11487,"date":"2023-05-20T17:33:10","date_gmt":"2023-05-20T21:33:10","guid":{"rendered":"https:\/\/ifintechworld.com\/uncategorized\/foot-locker-slumps-as-weak-demand-heavy-discounts-drive-annual-outlook-cut\/"},"modified":"2023-05-20T17:33:11","modified_gmt":"2023-05-20T21:33:11","slug":"foot-locker-slumps-as-weak-demand-heavy-discounts-drive-annual-outlook-cut","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=11487","title":{"rendered":"Foot Locker slumps as weak demand, heavy discounts drive annual outlook cut"},"content":{"rendered":"<div>\n<div id=\"imgCarousel\" class=\"imgCarousel\">\n<p><span class=\"text\">\u00a9 Reuters. FILE PHOTO: Customers walk by the Foot Locker store in Broomfield, Colorado in a slow shutter exposure November 17, 2016. REUTERS\/Rick Wilking<\/span><br \/>\n<i class=\"imgGrad\"><\/i>\n<\/div>\n<p>By Deborah Mary Sophia<\/p>\n<p>(Reuters) -Foot Locker Inc&#8217;s shares closed down 27% on Friday as the footwear retailer cut its annual sales and profit forecasts amid a sharp drop in demand and a hit from heavy discounts aimed at clearing excess inventories.<\/p>\n<p>The company also missed analysts&#8217; estimates for first-quarter results and named former Kohl&#8217;s Corp (NYSE:) executive Mike Baughn as its new finance chief, effective June 12.<\/p>\n<p>U.S. consumers have sharply cut back on discretionary spending amid elevated levels of inflation, hurting sales at companies ranging from big-box retailer <span itemscope=\"\" itemtype=\"http:\/\/schema.org\/Corporation\"><span itemprop=\"name\"> Target <\/span><\/span> Corp (NYSE:) to home improvement chain <span itemscope=\"\" itemtype=\"http:\/\/schema.org\/Corporation\"><span itemprop=\"name\"> Home Depot <\/span><\/span> Inc (NYSE:).<\/p>\n<p><span itemscope=\"\" itemtype=\"http:\/\/schema.org\/Corporation\"><span itemprop=\"name\"> Foot Locker <\/span><\/span> (NYSE:) doubled down on discounts to drive demand, which coupled with an increase in theft-related inventory losses led to a 400-basis point hit to the company&#8217;s quarterly gross margins.<\/p>\n<p>&#8220;We had forecast a pickup in growth in April &#8230; while trends did improve, they did not improve nearly to the extent we expected, and that weakness has continued into May,&#8221; Foot Locker Chief Executive Mary Dillon said on an earnings call, adding that the ramped up level of promotions would continue through the rest of 2023.<\/p>\n<p>Foot Locker&#8217;s results wiped out more than $1 billion from its market value and weighed on the sportswear sector, with <span itemscope=\"\" itemtype=\"http:\/\/schema.org\/Corporation\"><span itemprop=\"name\"> Nike <\/span><\/span> Inc (NYSE:), <span itemscope=\"\" itemtype=\"http:\/\/schema.org\/Corporation\"><span itemprop=\"name\"> Under Armour <\/span><\/span> Inc (NYSE:) and Vans maker VF Corp (NYSE:) falling between 4% and 9%.<\/p>\n<p>Other athletic goods retailers such as Hibbett Inc and Dick&#8217;s Sporting Goods (NYSE:) Inc also fell.<\/p>\n<p>&#8220;We know trends have weakened, but just the magnitude of the guidance cut is what&#8217;s disappointing &#8230; it&#8217;s a surprise how big (Foot Locker) had to cut it just two months after they gave it,&#8221; said Telsey Advisory Group analyst Cristina Fern\u00e1ndez, adding that the path to recovery was now steeper.<\/p>\n<p>Foot Locker now expects full-year comparable sales to fall between 7.5% and 9.0%. It had expected a drop of 3.5% to 5.5% earlier.<\/p>\n<p>The company also forecast annual adjusted per-share earnings between $2.00 and $2.25, compared with its previous outlook of $3.35 to $3.65.<\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.investing.com\/news\/stock-market-news\/foot-locker-slumps-as-weak-demand-heavy-discounts-drive-annual-forecast-cut-3086627\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>\u00a9 Reuters. FILE PHOTO: Customers walk by the Foot Locker store in Broomfield, Colorado in a slow shutter exposure November 17, 2016. REUTERS\/Rick Wilking By Deborah Mary Sophia (Reuters) -Foot Locker Inc&#8217;s shares closed down 27% on Friday as the footwear retailer cut its annual sales and profit forecasts amid a sharp drop in demand [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":11488,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[1],"tags":[83],"class_list":["post-11487","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-uncategorized","tag-featured","post_format-post-format-video"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Foot Locker slumps as weak demand, heavy discounts drive annual outlook cut | iFintechWorld<\/title>\n<meta name=\"description\" content=\"\u00a9 Reuters. 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