Foot Locker (FL) Q3 2025 earnings summary

Executive summary

• Total sales for Q3 2024 declined 1.4% year-over-year to $1,958 million, while comparable sales increased 2.4%, driven by improved conversion rates and positive trends in key banners.

• Gross margin expanded by 230 basis points to 29.6%, aided by reduced markdowns and higher merchandise margins, 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 (loss of $0.34 per share), while non-GAAP net income was $31 million ($0.33 per share), reflecting impairment and investment charges.

• Inventory decreased 6.3% year-over-year, marking the fourth consecutive quarter of inventory reduction; cash at quarter-end was $211 million and total debt was $445 million.

• The company revised its full-year sales and non-GAAP EPS guidance downward due to a more promotional environment and softer consumer demand outside peak periods.

Financial highlights

• Q3 2024 sales were $1,958 million, down from $1,986 million in Q3 2023; constant currency sales declined 2.2%.

• Comparable sales rose 2.4% year-over-year, with Foot Locker, Kids Foot Locker, Champ Sports, and WSS banners posting positive comps.

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

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

• Adjusted diluted EPS for Q3 was $0.33, up from $0.30 in the prior year; GAAP EPS was a loss of $0.34.

Outlook and guidance

• Full-year non-GAAP EPS guidance lowered to $1.20–$1.30, with full-year comps expected at +1% to +1.5%, at the low end of prior range.

• Full-year sales guidance revised to a decline of 3.5% to 1.5% year-over-year; Q4 comps expected at +1.5% to +3.5% and gross margin at 29.0%–29.2%.

• Capital expenditures for the year expected at $270 million, with adjusted capital expenditures at $320 million.

• Store count projected to decline 4% in 2024, with 27 openings and 130 closures; Champs Sports repositioning to complete by year-end.

• Long-term EBIT margin target of 8.5%-9% by 2028 reaffirmed; 2024 EBIT margin guidance at 2.3%-2.5%.