Foot Locker Suffered The Worst Share Price Crash Since The Financial Crisis

According to the world clothing shoes and hats net, the United States is famous.

Retailer

The most serious decline in share prices since the financial crisis is worrying that the growth momentum of the entire sporting goods retail industry has come to a close.

Foot Locker shares fell 28% due to lower profits, sales, profit margins and same store sales.

Foot Locker last quarter earnings per share were 62 cents, far below the average of 90 cents on Wall Street.

Consensus Metrix statistics show that comparable store sales fell by 6% over the same period last year, far below the expected 1.7% growth.

Dick Johnson, chief executive of the company, said:

The demand for top brands such as the Jordan series and Adidas's Stan Smith, etc. will be weak, and sales in fiscal year 2017 will continue to decline.

Shares of Foot Locker fell to $34.41, the biggest decline since November 2008.

The stock of Foot Locker has fallen by 1/3 this year.

Johnson said on the phone: "the magnitude of the decline is not as obvious as the data show."

Although Foot Locker's first quarter results in May were disappointing, Johnson said the company's bottom line rebound in February, and sales in 3 and April were also good.

The performance of the whole industry is very low, so are Under Armour, Dick 's Sporting Goods and Cabela' s.

Quo Vadis Capital analyst John Zolidis said in a research report that this phenomenon means that the whole sports retail industry may be in trouble for several years.

Industry microcosm

NPD analyst Matt Powell said this dilemma is not good news for the upcoming homecoming season.

NPD data collected from retailers showed that the total sales volume of American sports shoes continued to decline by 5% in July, while the sales of Nike also dropped by a high figure. The decline of Jordan and Converse declined significantly, while Under Armour experienced double-digit declines and Skechers also dropped by high digits.

Powell believes that the slowdown in the sports shoe industry will cause a lot of trouble.

Once the core category of basketball shoes continued to be weak, and retro shoes (represented by Stan Smith) has reached its peak. In July, sales of retro shoes dropped by 8%.

Sales of Spanish American sports shoes also decreased, mainly due to the Donald Trump's immigration policy, which led to a reduction in their consumption.

"As the largest sports shoe retailer in the United States, Foot Locker's performance is a microcosm of the industry as a whole," Powell said.

Foot Locker's performance has been outstanding in the US's sluggish retail industry. Last year, it achieved a brilliant performance of double sales growth and profit growth for the 25 quarter last year, in sharp contrast to the bleak sight of other traditional sports goods and apparel retailers who have closed down or even failed.

Zolidis said: "consumers have put their eyes on other things.

There are too many outlets for sportswear and footwear.

Reduced demand will also lead to a reduction in supply. Many companies may choose to lay off workers in the next few years. "

Foot Locker is trying to adapt to changes in consumer preferences, especially their preference for online shopping. Many consumers also choose more experiential consumption, such as travel and dining out.

Lack of innovation

Johnson points out that the whole industry lacks innovative products and is not closely connected with young consumers. He believes that cooperation between Adidas and Kanye West and Pharrell Williams is a relatively successful case in the past.

For Nike plans to sell products in Amazon, Johnson believes that this will not pose a great threat to Foot Locker. He expects Nike and other brands to only sell low-priced products on Amazon.

"The problem faced by retailers is simple: are customers willing to drive 30 minutes to a store, or stay at home and buy free delivery service," said Nathan Yates, director of research at Forward View consulting.

Large sportswear retailers usually work exclusively with brands such as Nike and Adidas to showcase their latest and limited edition products to help retailers attract young customers.

Foot Locker said the main problem was the lack of explosions.

Lauren Peters, chief financial officer, said that even though the number of product sales declined last quarter, the average selling price rose.

This means consumers are still willing to pay for cool products, she said.

More interesting reports, please pay attention to the world clothing shoes and hats net.