Stinky Quarter at Foot Locker

Foot Locker (FL Quote - Cramer on FL - Stock Picks) sharply cut its first-quarter earnings estimates, citing weaker-than-expected same-store sales and increased markdowns.

Shares were sliding $1.98, or 8.5%, to $21.29 in late trading Thursday.

The footwear retailer now sees earnings of 10 cents to 11 cents a share for the first quarter, less than a third of its prior forecast of 34 cents to 37 cents. Analysts polled by Thomson Financial predicted a profit of 36 cents a share.

"The shortfall in our expected earnings primarily reflects a first quarter comparable-store sales decline of 5.1% and additional markdowns taken in our U.S. stores," said Mathew Serra, Foot Locker chairman and chief executive.

The weakness primarily came from U.S. stores. Foot Locker said its international units performed in line with its expectations.

The news comes on the same day that the nation's major retail chains posted much weaker-than-expected sales for April, contributing to fears that consumers may be cutting back on spending in the wake of rising gas prices and the housing slump.