“We delivered third quarter results that were ahead of our expectations as strong execution and early progress against our Lace Up plan improved conversion trends across channels.  Looking forward, we are updating our outlook to reflect the momentum we have in our strategic initiatives into the fourth quarter, which includes strong results over the Thanksgiving week period, against the backdrop of ongoing consumer uncertainty.  As such, we are narrowing our 2023 outlook and still expect to end the year with inventory levels flat to down slightly, as compared with the prior year”, commented Mary Dillon, President and Chief Executive Officer of Foot Locker.

Third Quarter Results

In the third quarter of the current fiscal year, the company’s total sales declined by 8.6%, reaching 1.99 billion US dollars, on a comparable basis to the same period of fiscal 2022; excluding the effect of foreign exchange rate fluctuations, total sales were down by 10.0%.

In addition, Foot Locker’s comparable-store sales decreased in this period by 8.0% year-over-year due to the “ongoing consumer softness, changing vendor mix, and a 3% negative impact from the repositioning of Champs Sports”.

The retailer’s third quarter gross margin contracted by 470 basis points from a similar period a year ago, “driven by higher markdowns as well as occupancy deleverage and higher shrink”.

In the three months to the 28^th of October, the company’s net income totalled 28 million US dollars, or diluted earnings per share of 0.30 US dollars, as compared to 96 million US dollars, or diluted earnings per share of 1.01 US dollars, recorded in the third quarter of last year.

Store Base Update

In the third quarter of fiscal 2023, Foot Locker opened 22 new stores, remodelled or relocated 36 and closed 14. So, as of the 28^th of October, it operated 2,607 stores in 26 countries in North America, Europe, Asia, Australia, and New Zealand; in addition, 190 franchised stores were operating in the Middle East and Asia.

Full Year Guidance

The US-based retailer has further reduced its fiscal 2023 outlook and now expects its total sales to fall between 8.0% and 8.5%, as compared to the previous guidance of a decline between 8.0% and 9.0%. Non-GAAP earnings per share should be between 1.30 US dollars and 1.40 US dollars, as compared to the prior range of between 1.30 US dollars and 1.50 US dollars.