Athletic wear retailer Foot Locker (FL) fell on Wednesday after the company released its earnings report for Q3 2024. That report failed to impress investors, with EPS coming in at 33 cents, which missed Wall Street’s 40-cent estimate. That’s despite EPS increasing 10% from the 30 cents reported in Q3 2023.
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Adding to these woes is Q3 revenue of $1.958 billion, compared to analysts’ estimate of $2 billion for the quarter. It also bears mentioning that Foot Locker’s revenue dropped 1.4% year-over-year from $1.986 billion. Revenue fell 2.2% when excluding foreign exchange rate fluctuations.
What Went Wrong in Q3?
Foot Locker blames its lackluster Q3 performance on softening consumer spending trends. The retailer says this kicked in following a surge of business during the back-to-school season in August. Due to this, it failed to reach its top-and-bottom-line performance expectations for the period.
Foot Locker Guidance Update Hits Stock
Another negative for FL shares is updated guidance in the current Foot Locker earnings report. The retailer lowered its 2024 EPS outlook to $1.20 to $1.30, compared to Wall Street’s estimate of $1.51. It also dropped its revenue guidance to -1.5% and -1.0%, with its prior outlook ranging from -1.0% to +1.0%.
Foot Locker also provides an EPS outlook of 70 to 80 cents for its Q4 2024 earnings report. That’s not looking good next to Wall Street’s estimate of 92 cents per share.
These outlooks, along with the company’s EPS and revenue misses for the quarter, are taking a toll on FL stock today. As of this writing, the shares are down 13.69%, building on a 36.77% year-to-date decrease and a 30.87% 12-month fall.
Is FL Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Foot Locker is Hold based on four Buy ratings, six Hold ratings, and three Sell ratings over the last three months. That comes with an average price target of $27.08, a high of $34, and a low of $17. This represents a potential 33.89% upside for FL shares. These ratings and price targets are likely to change as analysts update their coverage of Foot Locker now that its latest earnings data is available.
