Foot Locker (FL) Q4 2025 earnings summary

Executive summary

• Achieved three consecutive quarters of positive comp sales and year-over-year gross margin expansion, outperforming revised expectations in Q4 2024.

• Over 400 store refreshes completed in 2024, enhancing in-store experience and digital capabilities.

• Progressed on the Lace Up Plan, focusing on store refreshes, digital enhancements, and loyalty program improvements.

• Net income from continuing operations was $55 million, reversing a net loss of $389 million in the prior year.

• Adjusted capital allocation to prioritize high-return customer-facing investments and slowed non-essential technology spend.

Financial highlights

• Q4 total comp sales increased 2.6%, led by Global Foot Locker and Kids Foot Locker banners at +3.6%.

• Gross margin expanded 300 basis points year-over-year to 29.6%, driven by merchandise margin recovery and reduced markdowns.

• Non-GAAP EPS for Q4 was $0.86, above guidance; GAAP EPS was $0.57.

• Total sales declined 5.8% due to lapping the 53rd week in 2023, FX headwinds, and store closures.

• Free cash flow for fiscal 2024 was $105 million; cash at quarter end was $401 million, with $446 million in total debt.

Outlook and guidance

• 2025 non-GAAP EPS guidance: $1.35–$1.65, ~10% growth at midpoint, including $0.05 FX headwind.

• 2025 total sales expected between -1% and +0.5%, comps of +1% to +2.5%.

• Gross margin expected to expand 40–80 bps to 29.3%–29.7%; SG&A rate to leverage 20–40 bps to 24.3%–24.5%.

• Store count to decrease ~4% in 2025, with 20 new stores and 110 closures; square footage down ~2%.

• Capital expenditures projected at $270–$300 million, emphasizing high-return store projects and $30 million in technology investments.