Foot Locker Q1 sales fall by 4.6% as net loss widens

Foot Locker, Inc. reported its first quarter 2025 results, with total sales down 4.6% year-on-year (YoY) to $1,788m (£1,400m).

Comparable sales fell by 2.6%, with North America down 0.5% and international sales down 8.5%, mainly due to a weaker performance in Europe.

Gross margin dropped by 0.4% compared to last year.

Merchandise margins slipped by 0.1%, and occupancy costs rose by 0.3% as a percentage of sales.

Selling, general and administrative (SG&A) expenses as a percentage of sales were up 1% due to lower sales and increased technology spend.

In real terms, SG&A costs were down 0.7% year-on-year.

Net loss for the quarter was $363m (£285m), compared to net income of $8m (£6m) in the same period last year.

On a non-generally accepted accounting principles (GAAP) basis, net loss was $6m (£5m), down from $21m (£16m) net income last year.

Loss per share was $3.81 (£3.00), with non-GAAP loss at $0.07 (£0.06) per share.

Non-GAAP results excluded non-cash impairment charges of $276m (£217m), which included a $140m (£110m) tradename charge and a $110m (£87m) goodwill impairment.

There was also a full valuation allowance on deferred tax assets and deferred tax costs related to parts of the European business totalling $124m (£98m).

At the end of the quarter, the company had $343m (£270m) in cash and cash equivalents and total debt of $445m (£350m).

Merchandise inventories stood at $1,665m (£1,300m), up 0.4% on last year, but down 0.7% when adjusted for currency.

Additionally, Foot Locker opened 9 new stores and closed 56, including all locations in South Korea, Denmark, Norway, Sweden, Greece, and Romania.

The company also remodelled or relocated 11 stores and refreshed 69 to new design standards.

As at 3rd May 2025, Foot Locker operated 2,363 stores across 20 countries, with a further 236 licensed stores running in the Middle East, Europe, and Asia.

The Greece and Romania businesses were sold to a license partner in April 2025.

On 15 May 2025, Foot Locker announced it had agreed to be acquired by DICK'S Sporting Goods.

Mary Dillon, CEO of Footlocker, said: “We are continuing to execute our Lace Up Plan strategies as we look forward to the successful completion of our transaction with DICK'S Sporting Goods.

“As we noted at the time we reported preliminary first quarter results, we experienced softer traffic trends globally that impacted our performance.

“During the quarter, we remained focused on the rollout of our Reimagined and Refresh programs to elevate our in-store experience, enhancing our digital offerings, deepening customer engagement through our FLX program and leveraging our strong brand partnerships to generate excitement for our customers.”

Dillon added: “As we have executed these and other initiatives to further advance our strategy, our teams have also remained nimble to navigate the uncertain macroeconomic environment, including managing our promotional levels, inventories, and expenses and remaining disciplined with our cash flows.”