Dick’s Sporting Goods says it remains bullish on its Foot Locker business, even as it lowered its yearly guidance for the segment, citing “challenging conditions” in the athletic footwear market.On Tuesday, Dick’s Sporting Goods reported that pro forma comps for Foot Locker declined 3.6% in the second quarter, versus a 0.6% increase during the first quarter. Dick’s Sporting Goods then slashed its yearly outlook for pro forma comparable sales at Foot Locker to a range of -2% to 0%. Comparatively, the Dick’s business reported 4.9% comp sales growth, buoyed by World Cup sales and increases in average ticket size and transactions.
On an earnings call, executives attributed Foot Locker’s slower performance to several factors, including a heavily promotional environment, elevated inventory of legacy footwear silhouettes, fewer footwear launches, and challenges in Europe, the Middle East and Africa. Dick’s Sporting Goods, as a whole, is also dealing with macroeconomic and geopolitical concerns such as higher fuel costs and supply chain headwinds. These, too, “weighed on profitability during the quarter,” executive chairman Ed Stack said.
“But let me be clear: We believe the Dick’s business remains strong, and none of this changes our confidence in the long-term opportunity at Foot Locker,” Stack continued. “We’re still early in the Foot Locker turnaround. We continue to invest to strengthen the business for the long term.”
