Bangkok,,Thailand,-,October,27,,2023:,Foot,Locker,Sign,Over

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Foot Locker, Inc. FL shares are diving today after it released <a target="_blank" href="https://www.benzinga.com/news/earnings/24/08/40598452/foot-locker-q2-earnings-revenue-and-eps-beat-multiple-store-closures-inventory-falls-10-and-more" rel="noreferrer noopener">second-quarter results</a>.



The company reported a second-quarter adjusted EPS loss of 5 cents,&nbsp;beating the&nbsp;analyst consensus estimate of a 7-cent&nbsp;loss and sales of $1.896 billion, beating the&nbsp;street view of $1.888 billion.



The company reiterated fiscal 2024&nbsp;sales change of (1%)-1%, or $8.072 billion to $8.236 billion vs. the consensus of $8.130 billion and adjusted EPS guidance&nbsp;of&nbsp;$1.50-$1.70 versus the&nbsp;<a target="_blank" href="https://www.benzinga.com/calendars/guidance" rel="noreferrer noopener">$1.54 consensus</a>.



J.P.Morgan analyst Matthew R. Boss reiterated the <a href="https://www.benzinga.com/quote/FL/analyst-ratings">Underweight rating on the stock.</a>



The analyst writes that July comps rose mid-single digits, slightly outperforming June, which was also up mid-single digits compared to May&#8217;s low single-digit decline.



Boss further adds that same-store sales improved alongside reduced markdowns, driven by Foot Locker&#8217;s enhanced product offerings, stronger marketing, and better store experiences.



Additionally, the analyst says that increased in-store productivity from a new workforce management tool and the relaunch of the FLX rewards program boosted loyalty penetration to 24% of net sales, compared to 22% last year.



The analyst writes that for the second half of the year, same-store sales are implied to be up 2.5%, vs. 2.6% growth in the second quarter and 0.4% in the first half of 2024. This equates to a -1.9% two-year stack, improving from the -8.9% seen in the first half.



The analyst adds that the implied gross margin is expected to expand by 360 basis points year-over-year in H2, reaching the midpoint of FY24 guidance of 29.5-29.7%, compared to a 50 bps increase in the quarter and a 40 bps decline in the first half of 2024.



Investors can gain exposure to the stock via&nbsp;Tidal Trust II YieldMax Ultra Option Income Strategy ETF ULTY&nbsp;and&nbsp;SPDR S&amp;P Retail ETF XRT.



Price Action: FL shares are down 10.5% at $29.36 at the last check Wednesday.



Photo by Sorbis via Shutterstock



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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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FL stock down on Q2 earnings release, beating analyst estimates. Reiterates fiscal 2024 sales guidance, J.P. Morgan maintains Underweight rating.

Foot Locker's Enhanced Product Offerings Boost Sales, But Analyst Warns of H2 Challenges - Foot Locker (NYSE:FL)

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Foot Locker's Enhanced Product Offerings Boost Sales, But Analyst Warns of H2 Challenges

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