Foot Locker Inc.

stock is down 22.5% in premarket trades after the company reported first-quarter sales and earnings below analysts’ expectations and lowered its outlook. The retailer reported net income of $36 million, compared with net income of $133 million in the prior year’s quarter. Adjusted EPS came to 70 cents, compared with earnings of $1.60 a share in the same period last year and below the FactSet consensus of 76 cents. Foot Locker’s first-quarter sales fell 11.4% to $1.93 billion, below the FactSet consensus of $1.99 billion. Same-store sales were down 9.1%, compared with the FactSet consensus for a 7.7% decline. The retailer said that the same-store sales decline was driven by macroeconomic headwinds, including lower income tax refunds in the United States, as well as the changing vendor mix and our repositioning of Champs Sports. Foot Locker also cut its FY2023 adjusted EPS outlook to $2.00-$2.25 from $3.35-$3.65. For the full year, Foot Locker lowered its sales outlook to a 6.5% to 8% decline from its prior guidance of a 3.5% to 5.5% decline. “Coming off the recent launch of our Lace Up Strategy at our Investor Day in March, we are making early progress in building a strong foundation to return to sustainable growth beyond this year,” said Foot Locker CEO Mary Dillon, in a statement.  “However, our sales have since softened meaningfully given the tough macroeconomic backdrop, causing us to reduce our guidance for the year as we take more aggressive markdowns to both drive demand and manage inventory.”

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