Foot Locker sees sales drop in Q2

Foot Locker has released its financial results for the second quarter ending 30 July 2022, revealing a 9.2% decrease in sales to £1.7 billion ($2 billion).

Second quarter comparable-store sales decreased by 10.3%, compared to "record" sales levels from last year. Net income dropped to £79 million ($94 million) from £364 million ($430 million) in the corresponding prior-year period.

Gross margin declined by 340 basis points, driven by higher markdowns, as the promotional environment started to normalise after last year's unusually favourable backdrop, followed by supply chain costs and occupancy deleverage.

During the second quarter, Foot Locker opened 34 new stores, remodelled or relocated 24 stores, and closed 50 stores. As of 30 July 2022, the group operated 2,799 stores in 28 countries in North America, Europe, Asia, Australia and New Zealand.

Looking ahead to FY22, Foot Locker expects sales to be down 6% to 7%, due to foreign exchange pressure and team sales divestiture.

Richard Johnson, Chairman and CEO of Foot Locker, said: "Despite an increasingly challenging macroeconomic backdrop, we delivered a solid quarter against the favourable fiscal stimulus and promotional environment from last year. Driven by strong execution from our team and ongoing progress against our key objectives, we grew our sales 16.4% above levels from 2019.

"Our strategy of diversifying our brand portfolio and offering more choice continues to resonate with consumers and is enabling us to expand our customer base. We are confident that our operational excellence, our improving ability to fuel our customer's desire for self-expression, and the secular trends driving our categories, put us in a strong position to navigate the expected ongoing macroeconomic headwinds in the back half of 2022."