Foot Locker Stock Drops 28% in 2025 After Delaying Profit Targets and Issuing Weak Outlook
Foot Locker delays its financial goals and issues disappointing profit guidance for 2025, causing shares to plunge despite strong holiday sales.
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Key Highlights
- Foot Locker postpones its EBIT margin target of 8.5% to 9% by two years, now aiming for 2028.
- The company projects full-year adjusted EPS between $1.50 and $1.70, below market expectations.
- Shares plunged 28% following the announcement, overshadowing better-than-expected Q4 results.
Shares of Foot Locker (FL) plummeted 28% on Wednesday after the sneaker retail giant delayed its key financial milestones and issued a cautious profit forecast for 2024. This setback overshadowed the company's stronger-than-anticipated holiday quarter performance.
CFO Mike Baughn stated that while the Lace Up plan launched in March 2023 remains on track, the timeline for achieving the EBIT margin goal of 8.5% to 9% has been extended to 2028. This revision reflects a "lower starting point exiting 2023," according to Baughn.
Foot Locker's updated guidance anticipates full-year adjusted earnings per share ranging from $1.50 to $1.70, falling short of analyst projections. Revenue is expected to fluctuate between a 1% decline and a 1% increase.
Despite reporting a fourth-quarter adjusted EPS of $0.38 and a 2% revenue increase to $2.38 billion—both surpassing forecasts—the company experienced a 350 basis point drop in gross margin due to aggressive price reductions.
As of 11:21 a.m. ET Wednesday, Foot Locker shares fell to $24.79, marking a 43% decline compared to the same period last year.
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