Foot Locker Inc. (FL) shares fell 12% on Tuesday after the sneaker retailer reported disappointing second-quarter earnings.
The company’s revenue declined 9.9% to $1.8 billion, missing analysts’ expectations of $1.9 billion. Foot Locker also lowered its full-year earnings guidance to $1.30 to $1.50 per share, down from $2.00 to $2.25 per share.
Foot Locker CEO Mary Dillon said the company saw a “softening in trends” in July and is adjusting its outlook to “best compete for price-sensitive consumers.”
The company is also suspending its quarterly cash dividend beyond its board’s recently approved October payout.
Foot Locker is not the only retailer facing challenges. Other athletic apparel companies, such as Nike Inc. (NKE) and Under Armour Inc. (UA), have also reported disappointing earnings in recent quarters.
The challenges facing Foot Locker and other retailers are due to a number of factors, including rising inflation, supply chain disruptions, and the ongoing COVID-19 pandemic.
Despite the challenges, Foot Locker is still planning to invest in its business. The company is opening new stores, expanding its online presence, and launching new marketing campaigns.
Foot Locker is also working to improve its inventory management. The company said it is “making progress” on its inventory levels and is “looking to best position the business for the upcoming holiday season.”
The company’s stock is down more than 30% year-to-date.
