Foot Locker raises outlook in Q3 results
Foot Locker has updated its guidance for FY22 following "better than expected" results for the third quarter ending 29 October 2022.
The company's total sales decreased by 0.7% to £1.83 billion ($2.17 billion), compared to £1.84 billion ($2.18 billion) in 2021. Excluding the effect of foreign exchange rate fluctuations, total sales increased by 3.3%.
Comparable-store sales rose by 0.8%, against "record sales" last year. This was driven by strong demand, brand diversification and improved access to high-quality inventory.
Gross margin declined by 270 basis points, largely due to higher markdowns on increased promotional activity across the industry and modest supply chain cost pressure.
Net income totalled £81 million ($96 million), compared with £133 million ($158 million) in Q3 2021.
For the first nine months of 2022, Foot Locker shared the following results:
- Net income of £273 million ($323 million), compared to £668 million ($790 million) in 2021.
- Total sales down 3.1% to £5.4 billion ($6.4 billion).
- Comparable store sales down 3.9%.
The company has updated its outlook for FY22, expecting total sales to drop 4% to 5%, compared to a decrease of 6% to 7% previously. It also expects gross margin between 31.7% and 31.8%, against 31.1% and 31.2% previously.
Andrew Page, Executive Vice President and CFO, said: "Following better-than-expected results for the third quarter and strong momentum coming out of the quarter, we are increasing our outlook for the fourth quarter and the full year. Whilst the macroeconomic environment remains uncertain, our demand trends, and inventory position in high-quality product gives us confidence we can achieve our new range, while also remaining flexible to manage through ongoing volatility."
Mary Dillon, President and CEO of Foot Locker, commented: "Foot Locker's solid third quarter results in the midst of ongoing macroeconomic challenges are a testament to the strengths of this organisation. Despite the tough environment, our expanding customer base remained resilient, and I'm proud that our team delivered sales above our expectations, thanks to their exceptional execution. I see tremendous opportunity to further leverage the power of our brand equity and our incredible field team to drive our growth in this exciting category."