Athletic shoes (and apparel) retailer Foot Locker has just posted its biggest stock decline since the last recessions on the heels of recent outlook which has renewed bogs of concern that the industry’s growth will not return.
As such, shares of the chain fell as much as 26 percent when news that recent results were weaker than analysts had expected—and weaker by nearly every benchmark. Second-quarter adjusted earnings per share, the company lists, hit 62 cents on revenue of $1.701 billion. Wall Street analysts had originally predicted the company to reach 90 cents per share on revenue of $1.8 billion. In addition, though, Foot Locker forecast that sales will continue the downward climb through the rest of the year. Sales at stores open for at least a year—one of the most (if not the most) important metrics of store growth—are expected to register down 4 percent.
Foot Locker blames the fall in sales on picky customers who seem to be no longer impressed by the latest high-end athletic shoes.
All in all, then, Foot Locker shares were trading at $35.94 on Friday morning, which is down $11.76.
Foot Locker CEO Richard Johnson comments, “Our team is working quickly to adjust our operations to a changed retail landscape in which we are seeing our consumers move faster than ever from one source of inspiration or influence to another.”
He also made it known they were pledging to work with the shoe makers to get ahead of trends more efficiently as well as to rethink capital expenditures and to cut overhead.
Johnson goes on to say, “Sales of some recent top styles fell well short of our expectations and impacted this quarter’s results. At the same time, we were affected by the limited availability of innovative new products in the market. We believe these industry dynamics will persist through 2017.”
In delivering the earnings, Foot Locker’s Johnson said “some recent top styles fell well short of expectations and impacted this quarter’s results.” He also cited a lack of “innovative new products.”
“We are obviously disappointed in the results for the quarter,” Johnson said. “Our team is working quickly to adjust our operations to a changed retail landscape in which we are seeing our consumers move faster than ever from one source of inspiration or influence to another.”