Foot Locker Shares Tumble After Q4 Sales Miss Wall Street Forecasts

Foot Locker's fourth-quarter sales fall shy of Wall Street forecasts as Nike, its key revenue driver, continues to generate more activity through its digital channels.
Author:
Updated:
Original:

Foot Locker  (FL) - Get Report shares slumped lower Friday after the athletic apparel retailer posted weaker-than-expected fourth quarter sales and held back on its 2021 profit guidance.

Foot Locker said adjusted earnings for the three months ending on February 1 came in at $1.55 per share, down 5% from the same period last year and  firmly ahead of the Street consensus forecast of $1.34cents per share. Group revenues, Footlocker said, fell 1.4% to $2.19 billion, missing analysts' estimates of a $2.29 billion tally, as same-store sales slipped 2.7% from last year.

Foot Locker also declined to provide any profit guidance for the 2021 financial year, "Given the ongoing uncertainty created by COVID-19."

"Despite the challenging macro backdrop of COVID-related store closures and supply chain congestion, we delivered strong bottom-line results in the fourth quarter," said CEO Richard Johnson. "Our customers responded well to our solid product offering and exciting holiday campaign, which drove stronger margins and continued acceleration of our digital business."

"Based on the resiliency we have shown over the course of 2020, I am looking forward with renewed optimism as we continue to advance our long-term strategies and build value for all our stakeholders," he added.

Foot Locker shares were marked 7.2% lower in early trading Friday following the earning release to change hands at $49.00 each, a move that still leaves the stock with a 68% gain over the past six months.

Late last year, Foot Locker launched a shareholder rights offering that could be used as a barrier to activist investor Daniel Kretinsky taking control of the sports apparel retailer.

Foot Locker said the rights would only be exercisable if an investor were to acquire a 20% stake in the company. Vesa Equity Investment, Foot Locker said, has built a 12.2% stake in the company. Vesa is an investment vehicle controlled by Czech Republic-born billionaire.