Foot Locker (FL) Q3 2025 earnings summary

Executive summary

• Total sales declined 1.4% year-over-year to $1,958 million, while comparable sales increased 2.4% due to improved conversion rates and product offerings, but both missed expectations amid a more promotional environment and cautious consumer spending.

• Gross margin expanded by 230 basis points to 29.6%, driven by merchandise margin recovery and fewer markdowns, but SG&A as a percentage of sales rose 210 basis points due to technology and brand investments.

• Net loss for the quarter was $33 million (GAAP EPS $(0.34)), while non-GAAP net income was $31 million ($0.33 per share), reflecting impairment and investment charges.

• The company revised its full-year sales and earnings guidance downward, reflecting a more conservative outlook amid ongoing market headwinds and a more promotional environment.

• Progress continued on cost savings and strategic initiatives, including the Lace Up Plan, store refreshes, and market exits.

Financial highlights

• Total sales for Q3 2024 were $1,958 million, down from $1,986 million in Q3 2023; comparable sales rose 2.4% year-over-year, led by strong back-to-school performance.

• Gross margin expanded to 29.6%, up 230 basis points year-over-year, mainly due to improved merchandise margins and lower markdowns.

• SG&A expenses increased to 24.6% of sales, up 210 basis points year-over-year, reflecting higher investment spending.

• Adjusted net income (non-GAAP) for Q3 2024 was $31 million, or $0.33 per diluted share, up from $0.30 in Q3 2023.

• Inventory was down 6.3% year-over-year, marking the fourth consecutive quarter of inventory reduction.

Outlook and guidance

• Full-year non-GAAP EPS guidance lowered to $1.20–$1.30, with full-year comparable sales expected at +1% to +1.5%; total sales guidance revised to -1.5% to -1.0%.

• Fourth quarter non-GAAP EPS expected at $0.70–$0.80, with comps of +1.5% to +3.5%.

• Gross margin in Q4 projected to improve 240–260 basis points year-over-year to 29.0%–29.2%.

• Store count to decline by 4% in 2024, with 27 openings and 130 closures; capital expenditures expected at $270–$320 million.

• Guidance includes a $100 million headwind from the 53rd week in 2023 and a $0.09 drag from a non-recurring FLX charge.