Foot Locker Down on Earnings Miss

Foot Locker, Inc. (NYSE:FL) took a sharp dive in share prices Friday on the latest quarterly figures

The New York-based athletic wear retailer reported a net loss of $98 million, or $0.93 per share, for the first quarter of 2020, compared to net income of $172 million, or $1.52 per share in the corresponding prior-year period.

Total first-quarter sales decreased 43.4%, to $1,176 million, compared to sales of $2,078 million for the corresponding prior-year period. Excluding the effect of foreign exchange rate fluctuations, total sales for the first quarter of 2020 decreased 42.9%. First quarter comparable-store sales decreased 42.8%.

FL’s gross margin rate decreased to 23% from 33.2% a year ago and the SG&A expense rate increased to 26.9% from 20% in the first quarter of 2019. The de-leverage for both gross margin and SG&A reflects the significant decline in sales due to the COVID-19 related store closures.

Said CEO Richard Johnson, “Against the backdrop of the pandemic and our global store closures, our team has focused intently on controlling what we can in order to protect our business.

“We have taken full advantage of the investments we have made in technology in recent years in order to stay connected with our customers and serve them online, worked aggressively to protect our financial position and flexibility, and taken actions to ensure we are well positioned to drive our business forward.”

FL shares began the last day before a long weekend, $2.03, or 6.9%, to $27.29.