Footwear retailer Foot Locker (NYSE:FL) updated investors on its second-quarter earnings progress today, and though sales are expected to come in strong, it is going to fall short of Wall Street's earnings expectations.
Even after adjusting for several restructuring charges incurred, the numbers still don't match the robust forecasts of analysts. While Foot Locker seems to have bounced back somewhat this quarter, earnings per share are expected to be between $0.66 and $0.70. That's in line to be above the $0.66 recorded a year ago, but analysts were looking for $0.77 per share.
A rebound in physical retail
Foot Locker said that despite the impact of the coronavirus pandemic, it was expecting comparable-store sales to shoot 18% higher year over year for the quarter, which ended Aug. 1. It's a strong rebound from the 43% decline experienced in the first quarter after all of its stores were closed; the retailer has been in a phased reopening since May, which has helped bolster sales.
The online channel was key to Foot Locker's survival in the first quarter, and it said it saw "continued momentum" across that platform, but it was its physical retail space that delivered for the footwear specialist this quarter.
With most stores in shopping malls, however, Foot Locker faces a tough challenge as these venues fade in relevance for consumers. It's also facing competition from the footwear and apparel makers themselves, such as Nike, adidas, and Under Armour, which are pushing consumers to shop their own sites directly.