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.
An Israeli delegation is heading to Qatar for indirect talks with Hamas on a possible hostage and ceasefire deal in Gaza.
The development comes ahead of a meeting between Israeli Prime Minister Benjamin Netanyahu and US President Donald Trump in Washington DC on Monday aimed at pushing forward peace efforts.
The US leader has been increasing pressure on the Israeli government and Hamas to secure a permanent ceasefire and an end to the 21-month-long war in Gaza.
Image: Smoke rises in Gaza following an explosion. Pic: Reuters
And Hamas, which runs the coastal Palestinian territory, said on Friday it has responded to the US-backed proposal in a “positive spirit”.
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So what is in the plan?
The plan is for an initial 60-day ceasefire that would include a partial release of hostages held by the militant group in exchange for more humanitarian supplies being allowed into Gaza.
The proposed truce calls for talks on ending the war altogether.
The war in Gaza began after Hamas attacked Israel on 7 October 2023, killing 1,200 people and taking 250 others hostage. Dozens of hostages have since been released or rescued by Israeli forces, while 50 remain in captivity, including about 30 who Israel believes are dead.
The proposal would reportedly see about half of the living hostages and about half of the dead hostages returned to Israel over 60 days, in five separate releases.
Eight living hostages would be freed on the first day and two released on the 50th day, according to an Arab diplomat from one of the mediating countries, it is reported.
Five dead hostages would be returned on the seventh day, five more on the 30th day and eight more on the 60th day.
That would leave 22 hostages still held in Gaza, 10 of them believed to be alive. It is not clear whether Israel or Hamas would determine who is to be released.
Hamas has sought guarantees that the initial truce would lead to a total end to the war and the withdrawal of Israeli troops from Gaza.
A Hamas official has said Mr Trump has guaranteed that the ceasefire will extend beyond 60 days if necessary to reach a peace deal, but there is no confirmation from the US of such a guarantee.
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1:34
Contractors allege colleagues ‘fired on Palestinians’
Possible challenges ahead
And in a sign of the potential challenges still facing the two sides, a Palestinian official from a militant group allied with Hamas said concerns remained.
The concerns were over humanitarian aid, passage through the Rafah crossing in southern Israel to Egypt and clarity over a timetable for Israeli troop withdrawals.
Hamas’s “positive” response to the proposal had slightly different wording on three issues around humanitarian aid, the status of the Israeli Defense Forces (IDF) inside Gaza and the language around guarantees beyond the 60-day ceasefire, a source with knowledge of the negotiations revealed.
But the source told Sky News: “Things are looking good.”
The Times of Israel reported Hamas has proposed three amendments to the proposed framework.
According to a source, Hamas wants the agreement to say that talks on a permanent ceasefire will continue until an agreement is reached; that aid will fully resume through mechanisms backed by the United Nations and other international aid organisations; and that the IDF withdraws to positions it maintained before the collapse of the previous ceasefire in March.
Mr Netanyahu’s office said in a statement that changes sought by Hamas to the ceasefire proposal were “not acceptable to Israel”.
However, his office said the delegation would still fly to Qatar to “continue efforts to secure the return of our hostages based on the Qatari proposal that Israel agreed to”.
Another potential challenge is that Mr Netanyahu has repeatedly said Hamas must be disarmed, which is a demand the militant group has so far refused to discuss.
Hamas has said it is willing to free all the hostages in exchange for a full withdrawal of Israeli troops and an end to the war in Gaza.
Israel rejects that offer, saying it will agree to end the war if Hamas surrenders, disarms and goes into exile – something that the group refuses.
Previous negotiations have stalled over Hamas demands of guarantees that further negotiations would lead to the war’s end, while Mr Netanyahu has insisted Israel would resume fighting to ensure the group’s destruction.
Details of those who have died and those who are missing after US flash floods are slowly emerging – with several young girls among those unaccounted for.
At least 69 people have died from the flooding in Texas, with an unknown number of people – including 11 girls and a counsellor from Camp Mystic in Kerr County – still missing.
As much as 10ins (25cm) of heavy rain fell in just a few hours overnight in central Kerr County on Friday, causing the banks of the Guadalupe River to burst at around 4am local time.
Tributes to those who died, and appeals for those who are still missing, are now being shared.
Image: Officials said 27 girls from Camp Mystic were reported missing after the flash floods in Texas
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3:35
Texas searches for missing children
Who are the victims?
Renee Smajstrla, eight
Image: Renee Smajstrla. Pic: Family handout
Renee’s uncle Shawn Salta confirmed the eight-year-old had died, and said she was one of 700 children staying at Camp Mystic.
“Renee has been found and while not the outcome we prayed for, the social media outreach likely assisted the first responders in helping to identify her so quickly,” he said.
“We are thankful she was with her friends and having the time of her life, as evidenced by this picture from yesterday.
“She will forever be living her best life at Camp Mystic.”
Sarah Marsh, eight
Image: Sarah Marsh. Pic: Family handout
Mountain Brook mayor Stewart Welch confirmed the death of eight-year-old Sarah, from Alabama, who was a pupil at Cherokee Bend Elementary.
“This is an unimaginable loss for her family, her school, and our entire community,” he said. “Sarah’s passing is a sorrow shared by all of us, and our hearts are with those who knew and loved her.
“As we grieve alongside the Marsh family, we also remember the many others affected by this tragedy.”
Eloise Peck and Lila Bonner, both nine
Image: Lila Bonner (left) and Eloise Peck. Pic: Family handout
Eloise’s mother Missy Peck told local broadcaster FOX4 that her daughter and Lila were best friends and cabinmates at Camp Mystic.
Writing about her daughter on Instagram, Ms Peck said: “She lost her life in the tragic flooding… our family is grieving and processing this unimaginable loss together.”
Lila’s family told NBC Dallas Fort Worth, a local affiliate network of Sky’s US partner network, that they were in “unimaginable grief”, and said: “We ache with all who loved her.”
Janie Hunt, nine
Image: Janie Hunt
Janie’s family confirmed her death to a reporter from NBC Dallas Fort Worth, who said “her mother tells me she’s devastated”.
Richard ‘Dick’ Eastland, owner of Camp Mystic
Image: Richard ‘Dick’ Eastland, owner of Camp Mystic. Pic: Family handout
Kerr County judge Rob Kelly told the Washington Post that Mr Eastland, who owned the camp died in a helicopter on the way to a Houston hospital.
Local outlet The Kerrville Daily Times reported he was killed while trying to save the girls from the flash floods.
“It doesn’t surprise me at all that his last act of kindness and sacrifice was working to save the lives of campers,” guest columnist Paige Sumner said in the Daily Times’ tribute to Mr Eastland.
Blair and Brooke Harber, 13 and 11
Image: Blair and Brooke Harber. Pic: Family handout
RJ Harber told CNN his daughters died during flooding in Kerr County, saying Blair “was a gifted student and had a generous kind heart”.
He added that Brooke “was like a light in any room, people gravitated to her and she made them laugh and enjoy the moment”.
He also said both his parents were still missing.
Jane Ragsdale, owner of Heart O’ the Hills camp
Image: Jane Ragsdale. Pic: Heart O’ the Hills
On Heart O’ the Hills’s website, the camp confirmed it was “right in the path of the flood” along the Guadalupe River.
While there were no campers in residence, Jane Ragsdale died. The camp said: “We at the camp are stunned and deeply saddened by Jane’s death.
“She embodied the spirit of Heart O’ the Hills and was exactly the type of strong, joyful woman that the camp aimed to develop with the girls entrusted to us each summer.”
Julian Ryan, 27
Image: Julian Ryan. Pic: GoFundMe
Relatives of Mr Ryan told local news broadcaster KHOU 11 that he died saving his family from floodwaters in Texas Hill County.
They described how he tried to smash a window to help them escape the rising water, but it cut his arm and he bled out before help could arrive.
In common with many parents across the country, here’s a conversation that I have with my young daughter on a semi-regular basis (bear with me, this will take on some political relevance eventually).
Me: “So it’s 15 minutes until your bedtime, you can either have a little bit of TV or do a jigsaw, not both.”
Daughter: “Ummmm, I want to watch TV.”
Me: “That’s fine, but it’s bed after that, you can’t do a jigsaw as well.”
Fast-forward 15 minutes.
Me: “Right, TV off now please, bedtime.”
(Pause)
Daughter: “I want to do a jigsaw.”
Now replace me with the government, the TV and jigsaw options with axing welfare cuts and scrapping the two-child cap, and my daughter with rebellious backbenchers.
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6:36
Rachel Reeves’s fiscal dilemma
That is the tension currently present between Downing Street and Labour MPs. And my initial ultimatum is the messaging being pumped out from the government this weekend.
In essence: you’ve had your welfare U-turn, so there’s no money left for the two-child cap to go as well.
As an aside – and before my inbox fills with angry emails lambasting me for using such a crude metaphor for policies that fundamentally alter the lives of some of the most vulnerable in society – yes, I hear you, and that’s part of my point.
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9:11
Welfare U-turn ‘has come at cost’
For many in Labour, this approach feels like the lives of their constituents are being used in a childish game of horse-trading.
So what can be done?
Well, the government could change the rules.
Altering the fiscal rules is – and will likely remain – an extremely unlikely solution. But as it happens, one of Labour’s proverbial grandparents has just popped round with a different suggestion.
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5:31
Welfare: ‘Didn’t get process right’ – PM
A wealth tax, Lord Neil Kinnock says, is the necessary outcome of the economic restrictions the party has placed on itself.
Ever the Labour storyteller, Lord Kinnock believes this would allow the government to craft a more compelling narrative about whose side this administration is on.
That could be valuable, given one of the big gripes from many backbench critics is that they still don’t really understand what this prime minister stands for – and by extension, what all these “difficult decisions” are in aid of.
The downside is whether it will actually raise much money.
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16:02
Is Corbyn an existential risk to Labour?
The super-rich may have lots of assets to take a slice from, but they also have expensive lawyers ready to find novel ways to keep their client’s cash away from the prying eyes of the state.
Or, of course, they could just leave – as many are doing already.
In the short term, the future is a bit easier to predict.
If Downing Street is indeed now saying there is no money to scrap the two-child cap (after heavy briefing in the opposite direction just weeks ago), an almighty tantrum from the backbenches is inevitable.
And as every parent knows, the more you give in, the harder it becomes to hold the line.