Retail / news
Dick's Sporting Goods Cuts Foot Locker Outlook but Calls Turnaround 'Early'
Dick's Sporting Goods lowered its annual comparable-sales guidance for Foot Locker after a weak second quarter, but said it remains confident in the long-term turnaround. Athletic footwear market conditions were cited as challenging.
In its latest earnings report, Dick's Sporting Goods said Foot Locker's pro forma comparable sales fell 3.6% in the second quarter, reversing a 0.6% increase in the first quarter. The company now expects Foot Locker's comparable sales for the year to land between -2% and 0%, down from its previous outlook.
Meanwhile, Dick's Sporting Goods' own comparable sales rose 4.9% during the quarter, fueled by World Cup merchandise sales and increases in average ticket size and transactions. The stronger performance at the core banner contrasted with the challenges at Foot Locker.
Executives attributed Foot Locker's slower results to a heavily promotional retail environment, elevated inventory of legacy footwear silhouettes, fewer new shoe launches, and difficulties in Europe, the Middle East and Africa. They also noted broader macroeconomic and geopolitical pressures, including higher fuel costs and supply chain headwinds.
Despite the reduced guidance, management said it remains bullish on Foot Locker's potential. One executive described the situation as 'still early in the Foot Locker turnaround' and said the company continues to invest to strengthen the business for the long term, reaffirming confidence in the acquisition.