Foot Locker Stock Fluctuates on Sales Miss and Soft Earnings Guidance

Foot Locker, Inc. (NYSE: FL) shares experienced a rollercoaster ride on Wednesday, March 5, 2025, following the release of its fourth-quarter and full-year 2024 earnings report. The athletic footwear retailer initially jumped on a big profit beat but then gave up its gains as full-year earnings outlook disappointed investors. The stock traded lower by 0.40% at $17.30 in premarket at last check Wednesday.

Foot Locker reported a fourth-quarter sales decline of 5.8% year-over-year to $2.243 billion, missing the analyst consensus estimate of $2.322 billion. Comparable sales for the quarter rose 2.6% versus last year, beating forecasts for a 2.3% rise. Adjusted EPS of $0.86 beat the analyst consensus of $0.72. The gross margin expanded 300 basis points, led by sequentially improved merchandise margin recapture trends relative to the third quarter of FY24 despite elevated promotions in the marketplace. Selling, general, and administrative expenses fell 6% Y/Y to $501 million. The operating margin was 3.6%, and operating income for the quarter jumped 148% to $82 million.

For the full year 2024, Foot Locker expects comparable sales growth of 1% to 2.5%, total sales change of -1.0% to +0.5%, and adjusted EPS of $1.35 to $1.65 versus the consensus of $1.77. The company plans to continue prioritizing customer-facing investments, keep inventories controlled, and manage its expense base with discipline to improve profitability. Foot Locker also expects consumer and category promotional pressures to remain uncertain in 2025, especially within the first half.

Mary Dillon, President and CEO of Foot Locker, Inc., commented on the results and outlook: "We delivered fourth quarter results above our previously revised expectations, as our investments and execution drove positive comparable sales and meaningful gross margin improvement compared to the prior year. Reflecting on 2024 overall, we made significant progress in elevating our in-store experience with our new Reimagined doors and store refresh program, enhancing our digital and mobile capabilities, expanding engagement with our FLX Rewards Program, and leaning into brand building through compelling campaigns and partnerships. Our return to positive comparable sales growth, gross margin expansion, and positive free cash flow in fiscal 2024 serve as proof points that our Lace Up Plan is working."

In conclusion, Foot Locker's stock fluctuated on Wednesday following a sales miss and soft earnings guidance. The company's fourth-quarter results showed positive comparable sales growth and gross margin expansion, but total sales fell short of expectations. Foot Locker's full-year outlook for 2025 indicates uncertainty in consumer spending and promotional pressures. Investors should monitor the company's progress in executing its Lace Up Plan and its ability to capitalize on its brand partnerships and leadership in the basketball category to drive growth and improve profitability.