Footlocker, Inc. (NYSE: FL) reported its second quarter earnings for the 2017 fiscal year and missed estimates heavily causing shares to plummet over 25% on Friday open.
Footlocker posted an adjusted EPS of 62 cents while analysts called for 90 cents and also posted revenue of $1.7 billion, while analysts called for $1.8 billion, according to Thomson Reuters.
Net income was $51 million or $0.39 per share compared to a net income of $127 million or $0.94 per share since last year’s same quarter. Second quarter comparable-store sales decreased 6 percent, but analysts projected a 1 percent increase, according to StreetAccount. Total sales fell 4.4 percent to $1.7 billion compared to last year’s quarter of $1.78 billion.
The second quarter results were brought down by a $50 million pre-tax litigation charged related to a lawsuit against the company involving the conversion of its pension plan.
Richard Johnson, Chairman and Chief Executive Officer said, “sales of some recent top styles fell well short of our expectations and impacted this quarter’s results. At the same time, we were affected by the limited availability of innovative new products in the market.”
Johnson added, “We are obviously disappointed in the results for the quarter, and our team is working quickly to adjust our operations to a changed retail landscape in which we are seeing our consumers move faster than ever from one source of inspiration or influence to another. In addition to working with our vendor partners to identify and capture new trends faster, we are also evaluating a realignment of our capital expenditure priorities and additional expense reductions so we can regain our momentum on both the top and bottom lines and deliver long-term value for our shareholders.”
Johnson believes that these industry dynamics will continue throughout the fiscal year, and says that the company expects comparable sales to be down 3 to 4 percent for the rest of the year.
Shares closed on Thursday at $47.70 and opened on Friday at $36.55. Shares lost over half value since the beginning of the year from $71.73 all the way down to early morning Friday of $35.03.