Foot Locker, Inc. has reported its financial results for the first quarter of 2024, showing a decrease in total sales of 2.8% compared to the same period last year. Comparable sales also decreased by 1.8%, with a 220 basis-point impact from the continued repositioning of the Champs Sports banner. However, there was a bright spot as global Foot Locker and Kids Foot Locker comparable sales increased by 1.1%.
The company's gross margin declined by 120 basis points, while SG&A as a percentage of sales increased by 220 basis points, due to investments in technology and brand-building, as well as higher inflation. Net income for the first quarter was $8 million, down from $36 million in the corresponding period last year. On a non-GAAP basis, net income was $21 million, compared to $66 million in the prior-year period.
Earnings per share (EPS) for the first quarter were $0.09, down from $0.38 in the first quarter of 2023. Non-GAAP EPS decreased to $0.22, from $0.70 in the corresponding prior-year period.
Foot Locker, Inc. also reported that its inventory decreased by 5.6% year-over-year, and the company's cash and cash equivalents totaled $282 million, while total debt was $446 million.
Looking ahead, the company reaffirmed its full-year 2024 outlook, with a non-GAAP EPS guidance of $1.50-$1.70. This includes an approximate $0.10 non-recurring charge in the second quarter of 2024 from the anticipated rollout of the company’s enhanced FLX loyalty program. The company's full-year outlook also includes expectations for sales change, comparable sales change, store count change, gross margin, SG&A rate, and more.
Despite the challenges in the first quarter, Foot Locker, Inc. remains confident in its "Lace Up" plan, which focuses on brand partnerships, digital and loyalty investments, and the evolution into a modern, omni-channel retailer. The company is also focused on strengthening its position at the intersection of basketball and sneaker culture.
Investors and analysts will have the opportunity to learn more about the company's first-quarter results and business update during the conference call scheduled for May 30, 2024. An investor presentation will be available on the company’s website before the start of the call, and a replay of the conference call will be accessible for a limited time following the event. Today the company's shares have moved 17.5% to a price of $26.46. For more information, read the company's full 8-K submission here.
