Foot Locker Shares Plunge 30% After Slashing Guidance
August 23, 2023: Foot Locker (NYSE: FL) shares plunged 30% on Wednesday after the athletic footwear retailer slashed its guidance for the fiscal year 2023, citing “consumer softness.”
The company now expects earnings per share to be in the range of $2.03 to $2.13, down from its previous guidance of $2.35 to $2.45. Revenue is also expected to fall below expectations, at $8.1 billion to $8.2 billion, down from the previous range of $8.3 billion to $8.5 billion.
Foot Locker said that the decline in guidance was due to several factors, including “continued consumer softness” and “elevated promotional activity.” The company also said it saw “some softness” in its international business.
The news sent Foot Locker shares tumbling to their lowest level in over a year. The stock is now down more than 50% from its 52-week high.
Takeaways:
- Foot Locker’s earnings guidance cut indicates that the athletic footwear industry faces some headwinds.
- The company cites “consumer softness” and “elevated promotional activity” as the main reasons for the decline in guidance.
- Foot Locker’s international business is also seeing some softness.
- The stock is down more than 50% from its 52-week high.
Actionable and practical takeaways:
- Investors should be cautious about investing in the athletic footwear industry now.
- Companies in the industry should focus on controlling costs and improving margins.
- Consumers should know the potential for discounts and promotions in the athletic footwear market.
