Foot Locker, Inc. FL has posted fourth-quarter fiscal 2024 results, with the top line lagging the Zacks Consensus Estimate and the bottom line surpassing the same. The company’s revenues decreased and earnings increased from the year-ago quarter.

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The company has delivered strong fourth-quarter results, exceeding revised expectations with positive comparable sales and gross margin improvements. In fiscal 2024, it advanced key initiatives, including in-store enhancements, digital and mobile expansion, increased engagement through the FLX Rewards Program, and strengthened brand partnerships.

In fiscal 2025, the company remains focused on customer-facing investments, disciplined inventory and expense management, and leveraging its brand leadership. While consumer and promotional pressures may persist, recent strategic activations, including a major basketball campaign, reinforce confidence in achieving growth expectations and driving long-term shareholder value.

Over the past three months, FL shares have lost 20% compared with the industry’s 15.9% decline.

More on Foot Locker’s Q4 Financial Results

The athletic shoes and apparel retailer posted adjusted earnings of 86 cents per share, which surpassed the Zacks Consensus Estimate of adjusted earnings of 73 cents. However, the figure increased from adjusted earnings of 38 cents in the prior-year quarter.

Total revenues of $2,248 million decreased 5.7% from the year-ago period. Excluding the impacts of foreign-currency fluctuations, total revenues decreased 4.6%. Revenues missed the Zacks Consensus Estimate of $2,328 million. 

Comparable sales rose 2.6% year over year, driven by 3.6% combined growth in global Foot Locker and Kids Foot Locker sales. Notably, Champs Sports achieved its second consecutive quarter of growth, posting a 1.8% increase in comparable sales.

Insight Into FL’s Margins

Gross profit was $663 million, up 4.6% year over year. FL's gross margin rate increased 300 basis points (bps) year over year to 29.6%. This was primarily driven by sequential improvements in merchandise margin recapture trends from the third quarter of fiscal 2024 despite heightened promotional activity in the market. Meanwhile, occupancy costs as a percentage of sales were unchanged from the prior-year period. We expected the gross margin to increase 220 bps year over year in the quarter under review.

Selling, general and administrative (SG&A) cost, as a percentage of sales, leveraged by 10 basis points year over year to 22.3%, driven by savings from the cost optimization program, disciplined cost management and lower incentive compensation, partially offset by investments in technology and brand building. We anticipated SG&A expenses, as a percentage of sales, to contract 10 bps.

Foot Locker Provides Q4 Store Update

In the fiscal fourth quarter, the company inaugurated seven stores and closed 47 stores. In this period, it remodeled or relocated 21 stores and refreshed 160 locations to align with its updated design standards, incorporating key elements of its current brand specifications.

As of Feb. 1, 2025, FL managed 2,410 stores across 26 countries in North America, Europe, Asia, Australia and New Zealand. Also, 224 franchised stores were operational in the Middle East, Europe and Asia.

FL’s Financial Snapshot: Cash, Debt & Equity Overview

This Zacks Rank #4 (Sell) company ended the fiscal fourth quarter with cash and cash equivalents of $401 million. Long-term debt and obligations under finance leases amounted to $441 million. Shareholders’ equity totaled $2.91 billion. As of Feb. 1, 2025, merchandise inventories were $1.53 billion, up 1.1% from the year-earlier quarter.

FL Stock Past Three-Month Performance

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What Lies Forward for Foot Locker?

The company has issued its fiscal 2025 outlook for the 52 weeks ending Jan. 31, 2026. Revenues are expected between a decline of 1% and growth of 0.5%, including a foreign currency headwind of 1%. Comparable sales are projected to increase 1% to 2.5%. Licensing and other revenues are estimated to be $24 million.

The gross margin is forecast between 29.3% and 29.7%, driven by improving merchandise margins. The SG&A rate is expected between 24.3% and 24.5%, with modest leverage, excluding incentive compensation normalization. The EBIT margin is expected to be 2.6-3.1%. 

Adjusted earnings per share are projected to be $1.35-$1.65. The capital expenditure is estimated at $270 million, with a focus on customer-facing investments. The adjusted capital expenditure is expected to be $300 million, including $30 million in technology investments reflected in the operating cash flow.

Stocks to Consider

Some better-ranked stocks are Boot Barn Holdings, Inc. BOOT, Deckers Outdoor Corporation DECK and lululemon athletica inc. LULU.

Boot Barn is a specialty retailer of premium, high-quality casual apparel. It sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Boot Barn’s fiscal 2025 earnings and revenues indicates growth of 21.4% and 14.9%, respectively, from the fiscal 2024 reported levels. BOOT delivered a trailing four-quarter average earnings surprise of 7.2%.

Deckers is a leading designer, producer and brand manager of innovative, niche footwear and accessories. It currently carries a Zacks Rank of 2.

The Zacks Consensus Estimate for DECK’s fiscal 2025 earnings and revenues implies growth of 21.2% and 15.6%, respectively, from the year-ago actuals. DECK delivered a trailing four-quarter average earnings surprise of 36.8%.

lululemon is a yoga-inspired athletic apparel company that creates lifestyle components. It has a Zacks Rank of 2 at present. LULU delivered a 6.7% earnings surprise in the last reported quarter. 

The consensus estimate for lululemon’s fiscal 2025 earnings and revenues indicates growth of 12.5% and 9.7%, respectively, from the fiscal 2024 reported levels. LULU delivered a trailing four-quarter average earnings surprise of 6.7%.

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Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report

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Boot Barn Holdings, Inc. (BOOT) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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