Foot Locker stock is witnessing heavy selling pressure on Friday’s trading session after Foot Locker Inc. (NYSE:FL) reported lower than estimated first-quarter earnings and lowered their earnings forecast.
Foot Locker Stock Results Miss Analysts’ Target
American footwear and sports apparel brand Foot Locker seems to be in a downward spiral because of its Q1 2019 earnings report, released May 24, 2019. In a development that would come as a bit of a shock to Foot Locker stock investors, the company failed to beat analysts’ estimates on both profits and revenues.
During the latest quarter, Foot Locker made $172 million that reflected earnings per share of $1.52. A year earlier, the earnings per share stood at $1.38. On an adjusted basis, the company earned $1.53 a share, missing analysts’ target of $1.61 a share.
Wall Street had estimated revenues of $2.11 billion but the company recorded revenues of $2.08 billion. Comparable store sales jumped 4.60%, but behind the analysts’ estimate of 5.6% increase.
Poor Outlook for Foot Locker
Moreover, the company cut its outlook for the year with reduced earnings per share projection. Foot Locker has stated that the $1.2 billion stock repurchase program is one of the factors behind its weak performance in the quarter.
After the markets opened on Friday, Foot Locker stock nosedived by as much as 16%. Investors have understandably reacted negatively to Foot Locker’s disappointing performance.
It should be noted that the current trade war between the US and China has been particularly problematic for Foot Locker and pretty much all other retailers and publicly trading companies.
Adidas and Nike have actually sent a letter to United States President Donald Trump, in which they plead and urge him to not hike the tariffs. If China decides to raise the tariffs on goods that are being exported by Foot Locker, then it could against weigh heavily on the company.
Foot Locker stock is down 17.50% and now selling at $43.60. The stock hit a new 52-week low of $43.04 earlier in the session.
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