American sportswear distributor Foot Locker has experienced a disappointing second quarter, with a 6 % like-for-like turnover drop. Its forecast is also quite ominous.
Few innovations
Foot Locker’s first quarter generated a 0.7 % turnover increase to 2 billion dollars (1.7 billion euro), but there was a 4.4 % slump in the second quarter, down to 1.7 billion dollars (1.4 billion euro). Looking at the like-for-like numbers, the company even suffered a 6 % slump. According to CEO Richard Johnson, its most popular items did not sell as well and there were not enough innovative new items on sale.
The results also impacted the company’s results, with a gross margin decline from 33 to 29.6 % as its administrative costs also grew from 19.7 % to 19.9 % of turnover. Net profit dropped from 127 to 51 million dollars (43 million euro), even though a court decision regarding its retirement plan also had its effect in this regard.
Foot Locker forecasts a difficult market with a 3 to 4 % like-for-like sales drop for the remainder of the year.
