Foot Locker shares tumbled to their biggest daily loss in nearly nine years after the athletic apparel retailer reported quarterly results well below Wall Street expectations, including a 6% drop in same-store sales.
CEO Richard Johnson suggested Foot Locker’s suppliers were in part to blame for its poor performance. “We were affected by the limited availability of innovative new products in the market,” he said in a news release.
“We believe these industry dynamics will persist through 2017, and we expect comparable sales to be down three to four percent over the remainder of the year,” he warned.
For the second quarter, Foot Locker posted adjusted earnings per share of 62 cents on revenue of $1.701 billion for the second quarter. Analysts polled by Thomson Reuters had expected the company to report earnings per share of 90 cents on sales of $1.8 billion.
In trading Friday, the company’s shares fell 27.9% to $34.38, the largest decline since November 2008. Entering Friday’s session, the stock had already fallen nearly 33% this year.
“While we believe our position in the market for premium sneakers remains very strong and our customers continue to look to us for compelling new athletic footwear and apparel styles, sales of some recent top styles fell well short of our expectations and impacted this quarter’s results,” Johnson said.
As Quartz reports, Foot Locker is heavily reliant on Nike, which hasn’t been delivering on the fashion-focused casual sneakers that consumers now prefer over performance shoes.
Adidas “has been gobbling up US market share with huge sales of its retro sneakers and new styles such as the NMD,” Quartz said, adding that Nike’s sales in athletic specialty and sporting goods stores were down 25% for the quarter.
Last year, Nike accounted for about 68% of Foot Locker’s product purchases. “To add to Foot Locker’s problems, shoppers buying Nike are increasingly doing it directly through Nike’s website or its stores, which Nike is investing in to make them experiences as much as places to shop,” Quartz noted.