Shares of Foot Locker (FL) are down more than 25% in premarket trading after the U.S. retailer suspended its quarterly dividend and announced disappointing second-quarter financial results.
Foot Locker announced earnings per share (EPS) of $0.04 U.S., matching analysts’ forecasts.
Revenue in Q2 came in at $1.86 billion U.S. versus $1.88 billion U.S. that was expected.
The company’s Q2 revenue was down 10% from $2.07 billion U.S. a year earlier.
Foot Locker lowered its outlook for the second time this year, saying inflation-weary consumers are not spending on the sneakers and other footwear and apparel it sells.
The company now expects sales to decline 8% to 9% for all of this year, compared to a previous forecast of down 6.5% to 8%.
Foot Locker is also forecasting a drop in same store sales of 9% to 10%, compared to its previous guidance of down 7.5% to 9%.
The company also cut its full-year earnings guidance to $1.30 U.S. to $1.50 U.S. per share, down from $2 U.S. to $2.25 U.S. a share.
Foot Locker said it also continues to be hurt by sneaker giant Nike’s (NKE) move to a direct-to-consumer model and away from third-party vendors.
Foot Locker’s inventories also remain high, rising 11% year-over-year in Q2 to $1.80 billion U.S.
Citing these issues, Foot Locker announced that it is suspending indefinitely its quarterly dividend payout to stockholders of $0.40 U.S. per share.
Before today’s selloff, Foot Locker’s stock had declined 37% over the last 12 months to trade at $23.20 U.S. per share.
