US' Foot Locker registers sales of $1,861 mn in Q2 FY23

In the second quarter, the company's comparable-store sales declined by 9.4 per cent. This was driven by ongoing consumer softness, a changing vendor mix, and the repositioning of Champs Sports, the company said in a press release.

"Our second quarter was broadly in line with our expectations, despite the still-tough consumer backdrop. However, we did see a softening in trends in July and are adjusting our 2023 outlook to allow us to best compete for price-sensitive consumers, while still leaning into the strategic investments that drive our Lace Up plan. Importantly, we are continuing to make progress on our inventory levels and look to best position the business for the upcoming holiday season and into 2024." 

Gross margin declined by 460 basis points compared to the prior-year period. This was driven by an increase in promotional activity, including higher markdowns, as well as occupancy deleverage and higher shrinkage. Selling, General & Administrative expenses (SG&A) increased by 190 basis points as a percentage of sales compared to the prior-year period. Savings from the cost optimisation programme were more than offset by underlying deleverage due to the sales decline, inflation, and investments in front-line wages and technology.

The company reported a loss of $5 million in the second quarter, compared to a net income of $94 million in the corresponding period of the prior year. On a non-GAAP basis, net income was $4 million, compared to $105 million in the corresponding period of the prior year.

"We remain committed to our Lace Up plan as introduced at our March 2023 Investor Day, and we are encouraged by the progress we are making against our strategic priorities heading towards the holiday season.  To ensure that we have the flexibility to continue to fund our strategic investments appropriately, we are pausing our quarterly cash dividend beyond our board's recently-approved October payout.  We intend to update the market on our go-forward capital allocation plans and the timing around our longer-term financial targets when we report fourth quarter results,” Dillon continued.

Fibre2Fashion News Desk (RR)