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Foot Locker misses on sales, trims full-year EPS guidance

24 May, 2019 13:05

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(Sharecast News) - US retailer Foot Locker saw profits rise in the first quarter of its trading year, but sales came in lower than expected and the group trimmed its full-year profit guidance amidst the prospect of tariffs on Chinese made goods hitting the sports shoe and apparel industry.

Foot Locker's net income rose 4.2% to $172m, or $1.52 a share, as expenses, including litigation costs pertaining to a pension-related matter, dropped during the quarter ended 4 May.

However, revenue rose just 2.6% to $2.08bn, below analysts' estimates of $2.12bn and same-store sales improved 4.6%, also short of the 5.6% increase predicted on the Street.

Chief executive Richard Johnson said: "We started the year with great energy, innovative products, and exciting customer events, leading to solid top-line growth in the first quarter with strong performance across our regions, banners, channels, and categories."

"Based on the momentum we have underway, we feel confident that the updated strategic imperatives we introduced at our Investor Day in March position us to deliver on our long-term goals."

While Foot Locker largely reiterated its full-year guidance, the firm did warn that EPS growth would be in the high single digits.

Earlier in the week, Foot Locker joined a series of US footwear and sports apparel businesses in signing a letter addressed to Donald Trump imploring him to reconsider tariffs on footwear made in China, labelling the levies a "catastrophic" move that would cost consumers as much as $7bn per annum.

As of 1345 BST, Foot Locker shares had slumped 9.46% in pre-market trading to $47.83 each.

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