Foot Locker 2026 Q1 Earnings Misses Targets as Net Income Plummets 4637.5%

Foot Locker (FL) reported its fiscal 2026 Q1 earnings on Jun 11th, 2025. The company faced significant challenges, missing expectations with a sharp decline in net income and earnings per share. In contrast, Foot Locker's guidance for the upcoming quarter suggests a modest recovery, forecasting earnings per share of $0.07 and revenue between $1.8 billion to $1.9 billion.

Revenue

Foot Locker's 2026 Q1 revenue fell by 4.6% from the previous year, totaling $1.79 billion compared to $1.87 billion in 2025 Q1. The stores segment contributed $1.46 billion to the revenue, while the direct-to-customer segment added $333 million. Additional revenue from other sources amounted to $6 million, bringing the total to $1.79 billion.

Earnings/Net Income

Foot Locker experienced a dramatic swing from a profit of $0.09 per share in 2025 Q1 to a loss of $3.81 per share in 2026 Q1, representing a 4333.3% negative change. The company reported a net loss of $363 million, marking a 4637.5% deterioration from the previous year's net income of $8 million. The EPS results indicate a poor financial performance.

Price Action

Foot Locker's stock price has shown mixed movements recently. It edged down 0.33% during the latest trading day, increased 1.51% over the most recent full trading week, and surged 101.17% month-to-date.

Post Earnings Price Action Review

The strategy of investing in Foot Locker when revenues beat expectations and holding for 30 days has proven ineffective. The approach yielded a return of -18.03%, significantly underperforming the benchmark return of 88.76%. The excess return stood at -106.80%, with a compound annual growth rate (CAGR) of -3.92%, indicating substantial losses throughout the backtested period. The strategy also exhibited a high maximum drawdown of -83.82% and a Sharpe ratio of -0.06, suggesting considerable risk with negative returns. These metrics highlight the challenges faced by investors in relying on such strategies for Foot Locker stock.

CEO Commentary

Mary Dillon, Chief Executive Officer, commented, "We are continuing to execute our Lace Up Plan strategies as we look forward to the successful completion of our transaction with DICK'S Sporting Goods. During the quarter, we experienced softer traffic trends globally that impacted our performance. We remained focused on the rollout of our Reimagined and Refresh programs to elevate our in-store experience, enhancing our digital offerings, and deepening customer engagement through our FLX program. Our teams have also remained nimble to navigate the uncertain macroeconomic environment, managing our promotional levels, inventories, and expenses while keeping disciplined with our cash flows."

Guidance

Foot Locker expects a net loss of $363 million for the first quarter, translating to a loss per share of $3.81. For the upcoming fiscal quarter ending July 31, 2025, the company anticipates earnings per share of $0.07, with total revenue guidance in the range of $1.8 billion to $1.9 billion.

Additional News

Foot Locker is set to be acquired by DICK'S Sporting Goods in a deal valued at approximately $2.5 billion, expected to close in the latter half of 2025. The acquisition will allow Foot Locker shareholders to choose between receiving $24.00 in cash or 0.1168 shares of DICK'S common stock per Foot Locker share. This strategic move aims to create a global leader in sports retail, with anticipated cost synergies of $100 to $125 million in the medium term. Additionally, Foot Locker named Franklin R. Bracken as President in March 2025, signaling leadership changes amid the acquisition process.