Foot Locker Says Its Lace Up Plan Is Working as It Closes Fiscal 2024 Above Its Revised Expectations
Foot Locker Inc. said on Wednesday that it delivered fourth quarter results above its previously revised expectations, as the company noted that investments and execution drove positive comparable sales and “meaningful” gross margin improvement compared to the prior year.
According to the sneaker retailer, total sales in the fourth quarter of 2024 were $2.24 billion, down 5.8 percent from $2.38 billion the same time in 2023. The company said results from 2023 included the effect of the 53rd week, which represented sales of $98 million. Excluding the effect of foreign exchange rate fluctuations, total sales for the fourth quarter decreased by 4.6 percent, the company noted.
Net income from continuing operations was $55 million, as compared with net loss of $389 million in the prior-year period, while Q4 earnings per share from continuing operations was 57 cents, as compared with loss of $4.13 per share in the fourth quarter of 2023.
For the full fiscal year of 2024, Foot Locker said total revenue was $7.99 billion, down from $8.17 billion in fiscal 2023. Net income from continuing operations in the year was 18 million, up from a $330 million loss last 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,” Mary Dillon, president and chief executive officer of Foot Locker, said in a statement.
The CEO went on to credit the company’s return to positive comparable sales growth, gross margin expansion, and positive free cash flow in fiscal 2024 to the retailer’s progress within its Lace Up plan, a strategy announced in 2023 to diversify brand portfolio mix, relaunch the Foot Locker brand with new store formats focused on an off-mall presence, maximize the loyalty program and invest in technology to enhance the customer journey.
Foot Locker also continued updating its store fleet in line with its broader retail enhancement plan. In the fourth quarter, Foot Locker remodeled or relocated 21 stores, refreshed 160 stores, closed 47 stores and opened 7 new stores. As of Feb. 1, the company operated 2,410 stores in 26 countries in North America, Europe, Asia, Australia and New Zealand. In addition, 224 licensed stores were operating in the Middle East, Europe and Asia.
In its earnings release on Wednesday, Foot Locker noted several impairment charges in incurred in the quarter and over the fiscal year.
The company said that included in the fourth quarter of 2024 impairment and other caption were $19 million of reorganization costs primarily related to the announced closure and relocation of the company’s global headquarters. There was also $10 million of impairment of long-lived assets and right-of-use assets accelerated tenancy charges related to the annual review of underperforming stores and the shutdown of the businesses operating in South Korea, Denmark, Norway and Sweden. The company said it will close all stores operating in those regions as it focuses on improving the overall results of its international operations.
For fiscal year 2024, Foot Locker said that it incurred impairment and other included impairment charges of $32 million from a review of underperforming stores and accelerated tenancy charges on right-of-use assets primarily related to its decision to exit the underperforming operations and the closure and sublease of an unprofitable store in Europe.
Additionally, the company incurred $26 million of reorganization costs primarily related to the announced closure and relocation of the company’s global headquarters. During the third quarter, the company recorded a $25 million write down of the Atmos tradename following an impairment review.
“Looking ahead, we will continue to prioritize our customer-facing investments, keep our inventories controlled, and manage our expense base with discipline to improve our profitability,” Dillion added. “While we expect consumer and category promotional pressures to remain uncertain into 2025, especially within the first half, our Lace Up plan strategies continue to resonate with our customers and brand partners.”
The company expects sales for fiscal 2025 to range between a 1 percent decrease and a 0.5 percent gain, with comparable sales to increase between 1 percent and 2.5 percent.
“We are confident that our strategies and actions will enable us to achieve our growth expectations in 2025 and are committed to delivering sustainable shareholder value creation,” Dillion said.
Foot Locker Inc. said on Wednesday that it delivered fourth quarter results above its previously revised expectations, as the company noted that investments and execution drove positive comparable sales and “meaningful” gross margin improvement compared to the prior year. According to the sneaker retailer, total sales in the fourth quarter of 2024 were $2.24 billion,…