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Foot Locker has reported a 11.4% decline in total sales to $1.92bn (£1.5bn) for its first quarter ended 29 April 2023, compared with sales of $2.1bn (£1.6bn) in the first quarter of 2022.
Excluding the effect of foreign exchange rate fluctuations, total sales for the first quarter decreased by 10%.
The New York-based specialty athletic retailer also saw its comparable-store sales decrease by 9.1%, which were driven by macroeconomic headwinds, including lower income tax refunds in the United States, as well as the changing vendor mix and our repositioning of Champs Sports.
As such, Foot Locker now expects full-year sales to fall 6.5% to 8%, down from the previous drop of 3.5% to 5.5%.
Its net income also decreased to $36m (£28.9m) as compared with $133m (£106.8m) in the first quarter of fiscal 2022.
Non-GAAP net income decreased to $66m (£53m) from $155m (£124.5) in the prior-year period.
Meanwhile, gross margin declined by 400 basis points compared with the prior-year period, driven by a combination of higher markdowns compared to historically low levels in the prior year, and occupancy deleverage, as well as an increase in theft-related shrinkage.
Additionally, its EPS decreased to $0.38 (£0.31) per share, versus $1.37 (£1.10) in the first quarter of fiscal 2022.
Mary Dillon, president and chief executive officer, said: “Coming off the recent launch of our Lace Up Strategy at our Investor Day in March, we are making early progress in building a strong foundation to return to sustainable growth beyond this year.
“However, our sales have since softened meaningfully given the tough macroeconomic backdrop, causing us to reduce our guidance for the year as we take more aggressive markdowns to both drive demand and manage inventory.”
She added: “Despite the challenging near-term trends, we remain committed to our long-term strategy, including making the necessary investments to drive our Lace Up plan, and maintain conviction in our ability to execute against our new strategic imperatives.”
