Foot Locker’s stock is in free fall after the retailer reported a loss for its 2023 fourth quarter and a muddled financial outlook for 2024.
During premarket trading, its stock dropped by nearly 11%, later plummeting by 28% after its earnings call with investors.
Due to its underperformance during the previous fiscal year, the 49-year-old retailer said its profitability goal, which it had shared during its March 2023 Investor Day, will be delayed by years. And in the 2024 fiscal year, Foot Locker plans to close 140 stores, while opening 35.
“Given our lower starting point exiting 2023, we expect a two-year delay in achieving that goal and now see reaching that target by 2028,” Mike Baughn, Foot Locker’s chief financial officer, said. He added that the company expects to reach an EBIT margin target of 8.5% to 9% in the timeframe.
But even so, New York-based Foot Locker beat Wall Street’s fourth-quarter estimates. The retailer recorded $2.38 billion in revenue, about $0.38 cents a share. Analysts had expected the retailer to report $2.28 billion in revenue, or $0.32 cents a share.
Mary Dillon, Foot Locker’s chief executive officer, told investors during its earnings call that the company plans to focus on reaching a “younger multicultural consumer,” while honing in on basketball, kids, and sneaker culture.
The company said it also has plans to launch a mobile app in North America, which will include a loyalty program. No details of the loyalty program were included in the company’s call to investors.
The company is also banking on its longtime partnership with Nike, the retailer’s key sales driver. During NBA All-Star 2024 in February, Foot Locker, Nike, and Jordan Brand launched “The Clinic,” a program that would include “interactive activations, real life basketball clinics, social media content and community events.”