Foot Locker disappoints, sales to drag in H1 but Asia growth, Carbon 38 could be highlights
Foot Locker shares plummeted more than 12% in Friday trading after weaker-than-expected quarterly results were compounded by news sales would likely continue to drag into H1 2018.
However, chief executive Richard Johnson remained upbeat about the future. While he said he wouldn’t be offering any strategy details for improving the business until later in the year, he hinted at expansion in Asia and highlighted the $15m stake it took in the luxury women’s activewear brand Carbon 38 in Q4 as positives.
But for Q4, comparable-stores sales fell 3.7% as total revenues of $2.21bn in the period just missed analyst’ $2.22bn call.
There was also a loss of $49m/40 cents per share for the quarter ended February 3, compared to a profit of $189m/$1.42 a year ago. Adjusted earnings, however, came to $1.26 per share, beating analysts’ view by a penny.
For the full year, the company earned $284m/$2.22 per share on a record $7.78bn in sales.
“The first quarter of 2018 will likely see the continuation of sales and margins in line with trends in the second half of 2017,” admitted CFO Lauren Peters. “However, we are confident that we will inflect back to positive comparable-store sales by the middle of 2018.”
Johnson added: “We remained a highly profitable company in 2017, even though our sales and profit results were not what we planned for going into the year. Looking ahead, with the product and other strategic initiatives we have underway, we believe we are positioned well, both organisationally and financially, to successfully transform our business to continue inspiring and serving an exceptionally dynamic youth culture for generations to come.”