May 21, 2023
Foot Locker posts double-digit sales decline and lowers forecast, appoints new CFO
May 21, 2023
Foot Locker announced on Friday total sales for the first quarter fell 11.4% to $1.927 billion, on the back of 9% dip in comparable store sales, as the U.S. retailer faced "macroeconomic headwinds" including lower income tax refunds in the U.S., as well as the changing vendor mix and the repositioning of its Champs Sports banner.
The New York-based footwear and apparel retailer said net income for the three months ending April 1 decreased to $36 million, as compared with $133 million in the first quarter of fiscal 2022.
"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," said Mary Dillon, president and chief executive officer. "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."
As a result of the sales decrease and headwinds, Foot Locker lowered its full-year guidance. It now predicts an annual sales dip of 6.5% to 8%, and comparable sales to be down between 7.5% and 9%.
Coinciding with the earnings update, Foot Locker announced the appointment of Mike Baughn to the role of executive vice president and chief financial officer, effective June 12.
Baughn joins Foot Locker from Kohl's Corporation, where he most recently served as executive vice president of finance and treasurer.
Robert Higginbotham, interim chief financial officer, will resume his role as senior vice president, investor relations, and financial planning and analysis, reporting to Baughn.
"Following a rigorous search process, we are thrilled to welcome to our leadership team, Mike Baughn, whose role will be instrumental in delivering our Lace Up plan," said Dillon. "I am confident Mike will further accelerate our new set of strategic imperatives and financial objectives designed to set us up for the next 50 years of growth. Let me also thank Rob for his leadership of the finance organization while we conducted the search, ongoing contributions, and critical role in launching our strategy at our Investor Day."
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