**Foot Locker, Inc. posted a double-digit decline in sales for the first half of 2023, citing a challenging retail environment and macroeconomic pressures.**.
In a financial report released on Thursday, the sportswear and footwear retailer said that its net sales decreased by 10% to $6.5 billion during the six-month period ended July 29. Comparable-store sales fell by 7.3%, with all regions experiencing declines..
Foot Locker attributed the sales drop to a combination of factors, including:.
* **Reduced consumer spending:** Inflation and economic uncertainty have led to reduced discretionary spending by consumers on non-essential items like apparel and footwear..
* **Increased competition:** The retail landscape is becoming increasingly competitive, with both traditional brick-and-mortar stores and online retailers vying for customers..
* **Supply chain disruptions:** Ongoing supply chain disruptions continue to affect the availability of certain products and delay deliveries..
The company’s gross margin also declined by 130 basis points to 31.9%, primarily due to increased markdowns and promotional activity. Foot Locker took a hit in its core North American market, where sales fell by 10.9% to $4.4 billion. Comparable-store sales in the region declined by 8.1%..
In Europe, Middle East, Africa (EMEA), sales decreased by 7.4% to $1.5 billion, with comparable-store sales dropping by 5.5%. The Asia Pacific region saw a smaller decline, with sales falling by 4.9% to $557 million and comparable-store sales decreasing by 4.2%..
Despite the decline in sales, Foot Locker’s net income remained relatively stable, with a slight increase from $241 million in the first half of 2022 to $243 million in the first half of 2023. This was largely due to a decrease in expenses, including reductions in advertising and marketing costs, as well as administrative expenses..
Looking ahead, Foot Locker said that it expects the challenging retail environment to continue in the second half of the year. The company is taking steps to mitigate the impact of these challenges, including:.
* **Optimizing inventory:** Reducing inventory levels to improve cash flow and reduce the need for markdowns..
* **Cost-cutting measures:** Implementing cost-cutting measures to improve profitability..
* **Strategic partnerships:** Exploring strategic partnerships to expand its reach and improve its product assortment..
Foot Locker’s stock price fell by over 10% in pre-market trading following the release of the financial report. The company’s shares have declined by approximately 25% year-to-date..
