The US retail group Foot Locker Inc. struggled with delivery problems and higher costs in the first quarter of the 2022/23 financial year. The results presented by the company on Friday were ambiguous: sales fell slightly short of market expectations, profits exceeded analysts’ forecasts despite a decline compared to the same quarter in the previous year. In view of the current figures, however, management was more confident about the rest of the year.
In the months of February to April, group sales amounted to almost 2.18 billion US dollars (2.04 billion euros). It was thus 1.0 percent above the level of the same quarter of the previous year. Adjusted for currency effects, revenues increased by 3.0 percent, like-for-like sales fell by 1.9 percent. The clothing business has developed significantly better than the demand for sneakers, the company explained.
Increased delivery and personnel costs as well as extensive discounts and value adjustments weighed on the result. Operating profit fell compared to the same quarter last year by 23.0 percent to 217 million US dollars. Net income attributable to shareholders even shrank by 34.2 percent to 133 million US dollars (125 million euros). Adjusted for special effects, quarterly net income was $155 million, down 24.4 percent year-on-year. In the run-up, however, an even more significant decline had been expected.
Despite the overall less-than-glamorous numbers, CEO Richard Johnson praised a “solid” quarter. In view of the difficult framework conditions, the company had made a “strong start” to the current year, he explained in the interim report. For the financial year as a whole, management now expects results “at the upper end” of the current forecast ranges. These envisage a decline in sales of four to six percent compared to the previous year and adjusted earnings per share of between 4.25 and 4.60 US dollars. In the past fiscal year, Foot Locker had reached $7.77.