Foot Locker Q4 earnings beat estimates: stock is still losing

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on Mar 6, 2024
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  • Foot Locker reported its financial results for the fourth quarter today.
  • Here's what its CFO Mike Baughn said in a press release on Wednesday.
  • $FL is trading 8.0% down in premarket following the Q4 earnings report.

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Foot Locker Inc (NYSE: FL) is down about 8.0% in premarket on Wednesday even though it posted an upbeat Q4 earnings report.

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Why is Foot Locker stock down on Wednesday?

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Investors are concerned because $FL disappointed in terms of profit guidance. The footwear retail stores company now forecasts its per-share earnings to fall between $1.50 and $1.70 this year.

Analysts, in comparison, were at $1.86 a share. Plus, Mike Baughn – chief financial officer of Foot Locker said in the earnings press release today:

Given our lower starting point exiting 2023, we expect a two-year delay in achieving that goal [8.5% to 9.0% EBIT margin] and now see reaching that target by 2028.

$FL ended its fourth quarter with $297 million in cash and equivalents and $447 million in debt. Wall Street currently has a consensus “hold” rating on Foot Locker stock.

Foot Locker Q4 earnings snapshot

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  • Lost $389 million that translates to $4.13 per share
  • Had $19 million of net income (20 cents a share) last year
  • Adjusted EPS printed at 38 cents as per the earnings report
  • Total sales popped 2.0% year-on-year to $2.38 billion
  • Consensus was 31 cents a share on $2.27 billion in revenue
  • Gross margin narrowed by 350 basis points in Q4

Foot Locker Inc narrowed its inventory by another 8.2% in the fourth quarter. CFO Baughn also said on Wednesday:

2024 will serve as a cash rebuilding year. We’re confident that our strategy will unlock longer-term shareholder value, including a return to quarterly dividends and share repurchases over time.

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