Shares of Foot Locker tumbled Wednesday over 30% after the company cuts its annual forecast citing consumers who are pulling back on spending as inflation remains high.
"We did see a softening in trends in July and are adjusting our 2023 outlook to allow us to best compete for price-sensitive consumers, while still leaning into the strategic investments," Foot Locker president and CEO Mary Dillon said in a statement.
The retail chain reported $5 million in net losses over the second quarter, or 5 cents a share, after sales slipped 9.9% to $1.891 billion from $2.065 billion.
Same-store sales sank over 9% and the retailer is also suspending its quarterly dividend.
Shares have lost nearly 40% of their value this year as of Tuesday's close.
"Importantly, we are continuing to make progress on our inventory levels and look to best position the business for the upcoming holiday season and into 2024," she continued. "To ensure that we have the flexibility to continue to fund our strategic investments appropriately, we are pausing our quarterly cash dividend beyond our Board's recently approved October payout."
A shopper exits the House Of Hoops by Foot Locker retail store at the Beverly Center in Los Angeles, California, U.S., on Wednesday, Aug. 21, 2013. Foot Locker Inc. is expected to announce second-quarter earnings results on Aug. 23. Photographer: Pat (Getty Images / Getty Images)
Foot Locker dropped its full-year guidance and now expects adjusted earnings per share (EPS) between $1.30 to $1.50, down from the previous guidance of $2.00 to $2.25.
Meanwhile, the retail store also said it expects sales to range from down 8.0% to 9.0%, more than previous guidance.
A shopper carries a Foot Locker bag in Montreal, Quebec, Canada, on Friday, Dec. 23, 2022. The consumer price index rose 6.8% from a year ago, higher than economist expectations of 6.7% and down from 6.9% in October, Statistics Canada reported Wednes (Getty Images )