This happened despite the company managing to exceed the expectations set by analysts, all due to a downward forecast for the year 2022.
In the fourth quarter of fiscal 2021, which concluded on January 29th, Foot Locker’s revenue increased 6.9% year over year to $2.3 billion. The improvements were aided by the company’s recent acquisitions of merchants WSS and Atmos. According to CEO Richard Johnson â€œIn 2021, we achieved great headway diversifying our brands, categories and channels as well as extending our client base across demographics and high-growth locationsâ€. Due to increasing expenditures and restructuring charges, the company’s net income fell from $123 to $103 million, meaning a big 16% downward movement in its fiscal fourth quarter. The firm earned $1.02 per share, which is down from $1.17 per share the previous year.
Foot Locker’s fiscal 2022 estimate was much more concerning. According to the corporation, no one vendor will account for 60% of its revenues in the following year, down from 70% in 2021. Foot Locker’s major supplier is Nike. With the help of its successful websites and company owned stores, the sports clothing behemoth is progressively moving toward a direct to consumer strategy. As a result, Foot Locker predicts sales to drop by as much as 6% in 2022. Its brick and mortar stores are projected to endure the brunt of that decline, with comparable sales down as much as 10%.
To offset the downturn in Nike related sales, Foot Locker plans to increase its partnerships with other footwear and sportswear brands, while also expanding its private label merchandise.
“We’re still working on diversifying our business mix and expanding our reach as a house of brands and banners,” Johnson added.
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