Foot Locker sees sales slow down in Q2 amid acquisition

Foot Locker Inc. has reported a total sales decrease of 2.4 percent to 1.85 billion dollars for the second quarter of 2025, marginally down from 1.89 billion dollars in the same period last year. The decline comes as the New York-based athletic retailer prepares for its acquisition by US company Dick’s Sporting Goods.

Excluding the effect of foreign exchange rate fluctuations, total sales for the quarter decreased by 3.7 percent. Comparable sales were down by 2 percent, despite a 1.4 percent increase in North American comparable sales. These North American gains were led by the company’s Foot Locker, Kids Foot Locker, and Champs Sports banners, with Champs Sports seeing its fourth consecutive quarter of positive comparable sales growth, rising by two percent.

Profitability declines despite expense discipline

Gross margin for the quarter decreased by 50 basis points year-over-year (YoY), driven by a 50 basis points decline in merchandise margins. Selling, general and administrative (SG&A) expenses as a percentage of sales increased by 20 basis points, primarily due to deleverage on the sales decline.

The company reported a net loss of 38 million dollars, compared to a net loss of 12 million dollars in the prior-year period. Diluted loss per share was 40 cents, compared to a loss per share of 13 cents in the second quarter of 2024.

Store modernisation efforts continue

Foot Locker’s store modernisation efforts continued in the quarter. The company opened two new stores and closed 11, bringing its total store count to 2,354 across 20 countries. Foot Locker also remodeled or relocated 14 stores and refreshed 52 stores to its updated design standards.

Inventories were valued at 1.70 billion dollars at the end of the quarter, which is 3.7 percent higher than the same period last year. This increase was attributed to a strategic pull-forward of autumn product and a 100 basis points change related to foreign currency fluctuations.

Dillon comments on ‘challenging’ environment as Dick’s acquisition nears

Mary Dillon, Foot Locker’s chief executive officer, stated that the company “built sequential momentum and delivered positive North American comparable sales results” but noted that the results also reflect “a challenging operating environment and soft store traffic trends, particularly in our WSS and international businesses.”

The acquisition by Dick’s Sporting Goods is expected to close on September 8, 2025. All required regulatory approvals have been received, and the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 expired on August 25, 2025. In light of the pending transaction, the company will not hold a conference call or provide financial guidance for the remainder of the year.

This article was created with the help of AI.