What happened

Shares of Foot Locker (NYSE:FL) were sliding along with much of the apparel retail industry as the consumer discretionary sector got crushed by the coronavirus pandemic. The spreading outbreak has forced nonessential retail stores like Foot Locker to close across the country, leaving the online channel as the company's only source of business for now.

As a result, the stock gave up 39% last month, according to data from S&P Global Market Intelligence. The chart below shows how shares fell sharply lower in the first half of the month.

^SPX Chart

^SPX data by YCharts.

So what

Like much of the apparel sector, Foot Locker shares drifted south last month as Americans' shopping patterns changed significantly, with consumers stocking up on essentials like food, medicine, and cleaning supplies, and forgoing purchases of apparel and other discretionary items.

The front of a Foot Locker power store

Image source: Foot Locker.

The stock's worst day of the month came on March 12 following the bankruptcy of rival Modell's, a sign of the challenges that have been facing the sporting goods retail industry for the last several years as a number of other smaller chains have gone bankrupt as well. Foot Locker itself said on March 17 that it would temporarily close all of its stores around the world with the the exception of a few markets in Asia, and withdrew its financial guidance.  

The move was not surprising since a number of apparel retailers have done the same thing, but it means that Foot Locker's sales will suffer significantly as long as its stores are closed because it generated just $1.3 billion of its $8 billion in revenue last year from the online channel.  

Now what

Foot Locker shares recovered some of their losses at the end of March on hopes for the federal government's rescue package. But April looks like it will be another tough month. The epidemic shows no signs of slowing down at the moment, and the stock has already fallen 17% through the first three days of April.

Foot Locker's balance sheet is solid with $907 million in cash and cash equivalents and just $122 million in debt. The company will survive the crisis, but the stock could certainly fall more while its stores remained closed.

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