Foot Locker Downgraded After Disappointing Q1, Shares Plunge

On May 29, 2025, UBS reaffirmed its "Buy" rating for Foot Locker, Inc. (NYSE:FL), with the stock priced at $23.93. Foot Locker is a prominent player in the retail industry, specializing in athletic footwear and apparel. The company faces competition from other major retailers like Nike and Adidas, but it continues to focus on strategic initiatives to enhance its market position.

Foot Locker's first-quarter fiscal 2025 results show a revenue of $1.79 billion, a 4.5% decline from the previous year. This drop is attributed to a 2.6% decrease in comparable sales, influenced by softer global traffic trends and store closures. Despite these challenges, the company's earnings per share (EPS) of -$0.07 met the Zacks Consensus Estimate, indicating some stability in its financial performance.

The company's revenue fell short of the Zacks Consensus Estimate of $1.83 billion, resulting in a negative surprise of 1.77%. However, Foot Locker has managed to surpass consensus EPS estimates in two of the last four quarters, demonstrating resilience in its earnings performance. The company is actively executing its Lace Up Plan strategies, focusing on initiatives like the Reimagined and Refresh programs to enhance digital offerings and customer engagement.

Foot Locker's stock, currently priced at $23.93, has seen a slight increase of 0.13% today. The stock has fluctuated between a low of $23.80 and a high of $23.98 during the day's trading. Over the past year, the stock has reached a high of $33.94 and a low of $11, reflecting the volatility in the retail sector. The company's market capitalization stands at approximately $2.29 billion, with a trading volume of 2,797,159 shares.

Despite the revenue challenges, Foot Locker is carefully managing promotions, inventories, expenses, and cash flow amid an uncertain macroeconomic environment. The company is also preparing for the completion of the DICK'S Sporting Goods transaction, which could further impact its financial performance and stock price in the coming quarters.

Foot Locker (NYSE:FL) reported first-quarter results that came in below analyst expectations as global traffic softness and international underperformance weighed on results.

The retailer posted a Q1 loss per share of $0.07, wider than the expected $0.01 loss. Revenue fell 4.6% year-over-year to $1.79 billion, also below the $1.86 billion consensus estimate.

Comparable sales declined 2.6%, with a modest 0.5% drop in North America offset by an 8.5% decline in international markets, primarily due to weakness in Foot Locker Europe.

CEO Mary Dillon emphasized ongoing progress in the company’s “Lace Up Plan” and expressed optimism around the pending merger with Dick’s Sporting Goods. She added that Foot Locker remains focused on inventory management, promotions, and cash flow discipline to navigate macroeconomic headwinds.

Foot Locker, Inc. (NYSE:FL) is a well-known retailer specializing in athletic footwear and apparel. The company operates globally, with a significant presence in the United States. Foot Locker competes with other major retailers like Nike and Adidas in the retail sector. Recently, Foot Locker has faced financial challenges, as highlighted by its latest earnings report.

On May 29, 2025, Foot Locker reported an earnings per share (EPS) of -$0.07, which was below the estimated EPS of -$0.05. This marks a significant decline from the $0.22 per share recorded in the same quarter last year. The company's revenue for the quarter was approximately $1.79 billion, falling short of the estimated $1.88 billion. This revenue figure also represents a 4.6% decline in total sales year-over-year.

Foot Locker's recent financial results highlight ongoing challenges within the Zacks Retail - Apparel and Shoes industry. Over the past four quarters, Foot Locker has exceeded consensus EPS estimates twice but has only surpassed revenue estimates once. The company's performance has been affected by softer global traffic trends, as noted by CEO Mary Dillon. Despite these challenges, Foot Locker continues to focus on enhancing in-store experiences and digital offerings.

The company's financial metrics provide further insight into its current situation. The price-to-sales ratio stands at 0.29, suggesting that the market values the company at 29 cents for every dollar of sales. Additionally, the debt-to-equity ratio is 0.96, indicating that the company has slightly less debt than equity.

Foot Locker is on the verge of being acquired by Dick's Sporting Goods, a significant development in the retail sector. This acquisition aims to expand Dick's market presence and could potentially provide Foot Locker with new opportunities for growth. Despite the current financial challenges, Foot Locker is leveraging strong brand partnerships and continuing its store modernization efforts, completing 69 store refreshes and launching new mobile apps for Champs Sports and Kids Foot Locker.

• Downward trend in consensus price target over the past year, reflecting a shift in analyst sentiment towards Foot Locker, Inc. (NYSE:FL).
• Recent financial results showed a 4.6% decline in total sales and a GAAP EPS loss of $3.81 for the first quarter of 2025.
• Despite challenges, Foot Locker continues its store modernization efforts and launches new mobile apps, with a notable price target of $32 from analyst firm Robert W. Baird.

Foot Locker, Inc. (NYSE:FL) is a prominent retailer specializing in athletic footwear and apparel. The company operates globally, with a strong presence in North America, Europe, and Asia. Foot Locker faces competition from other major retailers like DICK'S Sporting Goods, which has recently announced plans to acquire Foot Locker, aiming to strengthen its position in the sports retail industry.

Over the past year, Foot Locker's consensus price target has seen a downward trend, reflecting a shift in analyst sentiment. Last month, the average price target was $14, indicating a cautious outlook. This sentiment aligns with Foot Locker's recent financial results, which showed a 4.6% decline in total sales and a GAAP EPS loss of $3.81 for the first quarter of 2025.

Three months ago, the average price target was $19.6, suggesting a more optimistic view at that time. However, the company's comparable sales decreased by 2.6%, and the non-GAAP EPS showed a smaller loss of $0.07. Despite these challenges, Foot Locker continues its store modernization efforts, completing 69 store refreshes and launching new mobile apps for Champs Sports and Kids Foot Locker.

A year ago, analysts had a more positive outlook with an average price target of $24.93. However, the competitive retail sector and economic conditions have likely influenced the downward revisions. DICK'S Sporting Goods, a key competitor, reported record sales and a 4.5% growth in comparable sales, showcasing its strong market position.

Despite the challenges, analyst firm Robert W. Baird has set a price target of $32 for Foot Locker, indicating some confidence in the company's potential. Foot Locker's CEO, Mary Dillon, remains optimistic about the company's strategic direction, emphasizing the execution of their Lace Up Plan strategies and the anticipated completion of the transaction with DICK'S Sporting Goods.

Foot Locker (NYSE:FL) saw its shares climb over 5% intra-day today after the footwear retailer reported fourth-quarter fiscal 2025 results that exceeded earnings and comparable sales expectations. Despite a revenue shortfall, the company’s improved profitability and positive sales momentum bolstered investor confidence.

The retailer posted adjusted earnings per share (EPS) of $0.86, beating analyst projections of $0.72. While total revenue came in at $2.24 billion—falling short of the expected $2.32 billion—comparable sales rose 2.6%, surpassing the anticipated 2.25% increase.

A key highlight of the quarter was a 300-basis-point expansion in gross margin, reflecting the company’s focus on operational efficiencies and strategic investments. Foot Locker credited these gains to its ongoing turnaround efforts under the Lace Up Plan, which has been driving improved sales and profitability.

Looking ahead to fiscal year 2026, Foot Locker anticipates earnings per share between $1.35 and $1.65, below the consensus estimate of $1.71. Sales are expected to range from a slight 1% decline to a modest 0.5% increase, while comparable sales are projected to grow between 1% and 2.5%, compared to analyst expectations of 2.02% growth.

Foot Locker, Inc. (NYSE: FL) is a leading global retailer specializing in athletic footwear and apparel. The company operates various store formats, including Foot Locker, Kids Foot Locker, and Champs Sports, among others. Foot Locker competes with other major retailers like Nike and Adidas, which also have a strong presence in the athletic retail market.

On March 5, 2025, Foot Locker reported earnings per share (EPS) of $0.86, surpassing the estimated $0.73. However, the company generated revenue of $2.24 billion, slightly below the expected $2.32 billion. Despite the positive EPS, the revenue shortfall has raised concerns among investors, especially given the company's recent fiscal 2026 earnings guidance that fell short of expectations.

Foot Locker's stock has experienced fluctuations due to the disappointing fiscal 2026 earnings guidance, as highlighted by Barrons. The company's sales performance and future earnings outlook have been softer than anticipated, contributing to the stock's volatility. The holiday season results were mixed, and the company warned that profits might be under pressure in the coming year.

The company's performance is also affected by its largest brand partner, Nike, which is using discounts to clear out stale inventory. This strategy indicates ongoing challenges within the sneaker industry, suggesting potential difficulties for both Foot Locker and Nike. Despite these challenges, Foot Locker achieved a gross margin expansion of 300 basis points compared to the previous year.

Foot Locker completed 160 store refreshes during the quarter, bringing the total to over 400 for the year. The company has focused on enhancing the in-store experience, improving digital capabilities, and expanding customer engagement through the FLX Rewards Program. Foot Locker maintains a current ratio of 1.67, indicating a good level of liquidity to cover short-term liabilities.

Foot Locker (NYSE:FL) saw its shares climb over 5% intra-day today after the footwear retailer reported fourth-quarter fiscal 2025 results that exceeded earnings and comparable sales expectations. Despite a revenue shortfall, the company’s improved profitability and positive sales momentum bolstered investor confidence.

The retailer posted adjusted earnings per share (EPS) of $0.86, beating analyst projections of $0.72. While total revenue came in at $2.24 billion—falling short of the expected $2.32 billion—comparable sales rose 2.6%, surpassing the anticipated 2.25% increase.

A key highlight of the quarter was a 300-basis-point expansion in gross margin, reflecting the company’s focus on operational efficiencies and strategic investments. Foot Locker credited these gains to its ongoing turnaround efforts under the Lace Up Plan, which has been driving improved sales and profitability.

Looking ahead to fiscal year 2026, Foot Locker anticipates earnings per share between $1.35 and $1.65, below the consensus estimate of $1.71. Sales are expected to range from a slight 1% decline to a modest 0.5% increase, while comparable sales are projected to grow between 1% and 2.5%, compared to analyst expectations of 2.02% growth.