$FL (-2 %) | Foot Locker Q3 Earnings Highlights:

🔹 EPS: $0.33 (Est. $0.42) 🔴; DOWN YoY from $0.30

🔹 Revenue: $1.96B (Est. $2.02B) 🔴; DOWN -1.4% YoY

🔹 Comparable Sales: +2.4% (Est. +3.2%) 🔴

Q4 Guidance:

🔹 Revenue: $2.31B-$2.36B (Est. $2.35B) 🟡

🔹 EPS: $0.70-$0.80 (Est. $0.94) 🔴

🔹 Gross Margin: 29.0%-29.2%

FY24 Guidance:

🔹 Revenue: $8.09B-$8.13B (Est. $8.13B) 🟡

🔹 EPS: $1.20-$1.30 (Est. $1.53) 🔴

Q3 Margins and Profitability:

🔹 Gross Margin: 29.8% (UP 230 bps YoY); driven by reduced markdown levels

🔹 SG&A Expense: 24.8% of sales (UP 210 bps YoY); reflecting tech and brand-building investments

🔹 Operating Margin: 2.1% (DOWN YoY from 3.0%)

Q3 Inventory and Balance Sheet:

🔹 Inventory: $1.7B (DOWN -6.3% YoY)

🔹 Cash and Cash Equivalents: $211M

🔹 Total Debt: $445M

Operational Metrics:

🔹 Comparable sales growth driven by Foot Locker and Kids Foot Locker (+2.8%) and Champs Sports (+2.8%).

🔹 Gross margin improved due to reduced markdowns but impacted by elevated promotional activity.

🔹 SG&A rate increase driven by investments in technology, brand building, and expense management discipline.

Store Updates:

🔹 Opened 10 stores, closed 24 stores, remodeled/relocated 20 stores, and refreshed 167 stores.

🔹 Total store count: 2,450 stores across 26 countries, with 214 licensed stores in the Middle East and Asia.

Strategic Updates:

🔸 Continued rollout of "Home Court" experience in collaboration with Nike and Jordan Brand.

🔸 Announced a multi-year partnership with the Chicago Bulls.

🔸 Launched a revamped mobile app and enhanced FLX Rewards Program.

CEO Commentary:

🔸 "While our third-quarter performance fell short of expectations, we remain focused on executing our strategies, including the Lace Up Plan, and leveraging key partnerships to drive growth and enhance customer engagement." – Mary Dillon, CEO