Shares of Foot Locker plummet, which earnings miss Wall Street estimates

Pedestrians walk past a locker shop in New York.

Michael Nagle Bloomberg | Getty Images

Shares of Foot Locker fell by more than 16% in morning trading Friday after the shoe retailer reported first-quarter tax results that missed Wall Street profits and sales estimates.

The company is under pressure as a shoe company, like Nike, completely bypasses dealers by selling directly to its customers. Foot Locker relies heavily on relationships with brands such as Nike, which alone accounted for about 66% of sales in fiscal 201[ads1]8, according to analyst estimates. Most stores are also located in shopping malls, although shoppers prevent them from shopping online.

The broader shoe industry faces its own challenges when President Donald Trump has threatened to charge more footwear fees imported from China. It is one of more than 170 shoe dealers, including Nike, Under Armor and Adidas who recently sent a letter to the White House asking Trump to lie down.

Here's what the company reported for the quarter ended May 4, relative to which wall Street expected, based on average analyst estimates made by Refinitiv:

  • Adjusted earnings per share: $ 1.53 vs. $ 1.60 expected [19659008] Revenue: $ 2.08 billion against $ 2.1 billion expected

Unadjusted reported Foot Locker Fund's first quarter net income of $ 172 million, or $ 1.52 per share, up from $ 165 million, or $ 1, 38 per share the previous year.

Net sales rose 2.62% to $ 2.08 billion, lacking expectations of $ 2.1 billion. 19659002] Foot Locker spent $ 1.8 million to buy 32,100 shares in the quarter – less than analysts expected. As a result, the company says that it now expects earnings per share to be "high single digits" for the year, instead of double-digit growth.

In the first quarter, Foot Locker earned $ 1.53 per share, except the effect of pension costs and other items, which are less than the $ 1.60 share expected by analysts surveyed by Refinitiv.

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