Shoe retailer Foot Locker reported a sharp drop in sales, the latest sign of financial struggles for the retail industry on the heels of weak sales reports from Target and Home Depot earlier this week.
Shoe retailer Foot Locker announced an 11.4% drop in sales for the start of 2023.
Foot Locker sales decreased 11.4% in the first quarter of 2023, pushing net income down $97 million from 2022, according to the company’s earnings report released Thursday evening.
Foot Locker’s stock was down roughly 25% when markets opened Friday morning compared to close on Thursday.
Foot Locker also said its expected sales loss would increase 6.5% to 8% because the company plans to increase discounts in an effort to drive demand and manage inventory.
On Tuesday, home improvement retailer Home Depot reported its biggest revenue loss in more than two decades and lowered its forecast for 2023, largely due to larger trends, like interest rate hikes and inflation. Customers are delaying large-scale home improvement projects and limiting more expensive purchases from the store, like patio sets and grills, the company said. Target, which announced earnings Wednesday, revealed sales had barely grown in the beginning of the year, despite earnings and revenue surpassing analyst expectations. Comparable sales were flat for the discount retailer in quarter one, starting strong in February but softening in March and April. Organized retail theft also put a major dent in Target’s sales, as the amount of retail shrink—which represents the amount of products lost to theft and human error—is estimated to scoop $500 million out of profits.
Target Earnings Squeezed as Shoppers Stick to Basics (Wall Street Journal)