Foot Locker’s stock plunges 28% as sneaker retailer blames dismal results on ‘consumer softness’

Published

1 year ago

August 24, 2023

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Foot Locker’s stock plunged by nearly a third after the sneaker retailer reported dismal earnings in the second quarter that it blamed on “ongoing consumer softness.”

In the latest quarter, Foot Locker’s sales fell 9.9% to $1.8 billion — a sharp drop from the $2.1 billion a year earlier, the company said in its earnings report Wednesday

Foot Locker’s share price tumbled 28% to close at $16.64.

The New York-based retailer, which has nearly 900 outposts across the US, slashed its yearly forecast due to “the still-tough consumer backdrop,” and now expects sales to decline 8% to 9% for the year. It originally predicted sales would be down 6.5% to 8%.

“We did see a softening in trends in July and are adjusting our 2023 outlook to allow us to best compete for price-sensitive consumer,” Foot Locker chief Mary Dillon said in a statement.

The footwear chain slashed its yearly earnings outlook to between $2 and $2.25 per share — down from the $3.35 to $3.65 a share it originally predicted and well below the $3.47 analysts were expecting.

A day earlier, Macy’s shares dropped after it posted declining sales in its second-quarter earnings, which it attributed to declining consumer spending and increased credit card delinquencies

Macy’s net sales fell to $5.1 billion in the 13-week period ended July 29 — down from the $5.6 billion reported in the same period last year.

In-store sales at Macy’s 500-plus locations also dropped 8% and digital sales declined 10% compared with the year-ago period, sending Macy’s share price tumbling over 14%, to $12.57 on Tuesday.

Macy’s said there were particular challenges in the active, casual and sleepwear categories, while beauty products and fragrances performed better.

In addition, other revenues — such as earnings from credit interest and other non-operating revenues — decreased $84 million from the prior year period, to $150 million.

The New York City-based department store chain attributed the losses to “credit card revenues which were negatively impacted by an increased rate of delinquencies.”

Customers paying their credit card bills on time is viewed as a proxy for consumer health, and an increased number of defaulted payments is an indicator that consumers will have to prioritize bills over shopping.

“In light of ongoing macroeconomic pressures and uncertainty on when those will abate, the company continues to take a cautious approach on the consumer,” Macy’s earnings report said.

The department store’s chairman and chief executive, Jeff Gennette, reaffirmed the retailer’s cautious outlook on consumer spending in an earnings call with investors on Tuesday, “especially at Macy’s where roughly 50% of the identified customers have an average household income of $75,000 or under,” he said.

“We have seen the Macy’s customer more aggressively pull back on spend in our discretionary categories. They are not converting as easily and becoming more intentional on the allocation of their disposable income with an ongoing shift to services and experiences,” he added.

Macy’s has been underperforming in the stock market this year. Its stock has fallen more than 37% year to date.

In yet another example of softening consumer spend, Target said its quarterly sales fell for the first time in six years.

Sales at stores and digital channels open for at least a year were off 5.4% from a year earlier, according to Targets earnings report released last week, while digital sales slipped 10.5%.

Though Target’s longtime CEO Brian Cornell attributed part of the losses to “the impact of inflation,” CFO Michael Fiddelke added that boycotts of the retailer’s controversial “Pride” collection also contributed to the quarter’s results.

Dick’s Sporting Goods also missed analyst forecasts for the second quarter, reporting a 23% drop in profits across its more than 700 stores nationwide — despite sales rising 3.6%.

Dicks attributed the losses to organized retail crime and our ability to effectively manage inventory shrink, an industry term used to describe stolen or lost merchandise.

Entertainment

Pilot killed as Motley Crue frontman’s jet crashes at Arizona airport

Published

5 hours ago

February 11, 2025

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Pilot killed as Motley Crue frontman's jet crashes at Arizona airport

A pilot has died after a private jet owned by Motley Crue frontman Vince Neil crashed into another plane at an airport in Arizona.

Neil was not on board at the time of the collision, which happened off the runway at Scottsdale Airport on Monday afternoon.

Neil’s girlfriend Rain Andreani and her friend suffered injuries which are not thought to be life-threatening.

They were taken to hospital with the jet’s co-pilot, who was also injured.

“While details are still emerging, our hearts go out to the families of both the pilot who lost his life and the passengers who suffered injuries,” Motley Crue said in a statement.

“Motley Crue will announce a way to help support the family of the deceased pilot – stand by for an announcement very soon”.

Rain Andreani broke five ribs in the crash and the dogs the women were travelling with survived, TMZ reports.

Neil’s jet was arriving from Austin, Texas, when one of its two sets of landing gears failed.

The Learjet veered off the runway after landing and crashed into a Gulfstream 200 business jet.

Neil’s lawyer said the singer is “grateful for the critical aid of all first responders assisting today”.

The Federal Aviation Administration said the incident was under investigation.

Motley Crue enjoyed major success throughout the 1980s, selling more than 100 million records.

Vince Neil fronted the rock band from their formation in 1981 until he left in 1992.

He later reunited with the band in 1996 and fronted them until they retired in 2015, and again from the band’s 2018 reunion onwards.

World

Trump issues Gaza ceasefire ultimatum to Hamas as he warns ‘all hell is going to break out’ if hostages not returned

Published

5 hours ago

February 11, 2025

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Trump issues Gaza ceasefire ultimatum to Hamas as he warns 'all hell is going to break out' if hostages not returned

Donald Trump says the Gaza ceasefire should be cancelled if all remaining Israeli hostages are not returned by noon on Saturday – as he warned Hamas that “all hell is going to break out”.

The US president’s intervention came hours after Hamas has said it will delay the release of more hostages and accused Israel of violating their ceasefire deal.

While signing a series of new executive orders, Mr Trump said he feared many Israeli hostages scheduled for release are already dead.

Referring to his Saturday deadline for the release of hostages, Mr Trump said: “If they’re not here, all hell is going to break out.”

He acknowledged that a decision to end the ceasefire was up to Israel, adding: “I’m speaking for myself. Israel can override it.”

Hours earlier, Mr Trump said Palestinians would not have the right to return under his plan for US “ownership” of Gaza – contradicting officials in his administration who said they would be relocated temporarily.

Trump latest: ‘Palestinians will have no right to Gaza return’

Hamas halts release of hostages

Earlier on Monday, Hamas claimed ceasefire violations had included “delaying the return of the displaced to the northern Gaza Strip, and targeting them with shelling and gunfire”.

Spokesman Abu Obeida said Hamas remained committed if Israel kept to the terms, but that the 15 February handover was postponed “until the occupation commits to and compensates for the past weeks”.

Egyptian security sources told Reuters that mediators now fear the deal will break down.

They said Hamas believes Israel isn’t serious about the ceasefire – which began on 19 January.

The last hostage release took place at the weekend and saw three Israeli men set free. Five Thai citizens released last month were also finally reunited with their families in Bangkok.

They were among about 250 people taken during the 7 October 2023 attack, when 1,200 people were murdered.

Five swaps have taken place so far, with 21 hostages and more than 730 Palestinian prisoners released.

Saturday’s exchange was due to involve three more Israelis and hundreds of Palestinians.

Defence minister Israel Katz said any delay in releasing hostages would be “a complete violation” and he had instructed troops to be on highest alert.

The Hostages and Missing Family Forum called on mediating countries to restore the deal, saying “time is of the essence” and citing “the shocking conditions of the hostages released last Saturday”.

As part of the ceasefire deal, Israeli forces pulled back from a key passage through Gaza on Sunday.

The four-mile-long Netzarim corridor separates northern Gaza from the south, and hundreds of thousands of displaced Palestinians have now crossed back over.

However, Israel pushed back the withdrawal by a few days in protest at the chaotic release of hostages Arbel Yehud and Gadi Moses.

This may be what Hamas is referencing what it talks of “delaying the return of the displaced”.

There have also been examples of Israeli troops shooting at or near Palestinians approaching Israeli forces after being warned to stay back.

So far, little progress has been made on an extension to the first six-week phase of the ceasefire.

A delegation from Israel has arrived in Qatar for further talks amid concern the deal might collapse before all remaining hostages are freed.

Israel has previously said it will not agree to a complete withdrawal from Gaza until Hamas’s military and political capabilities are eliminated.

Hamas has countered that it will not hand over the final hostages until Israel removes all its troops from Gaza.

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