In the fourth quarter (Q4) of FY22, comparable-store sales grew by 4.2 per cent, driven by increased traffic and improved access to high-quality inventory, resulting in broad-based strength across brands and regions. However, total sales decreased by 0.3 per cent, to $2,334 million, compared with sales of $2,341 million in the fourth quarter of 2021. Gross margin declined by 290 basis points compared with the prior-year period, driven mainly by higher markdowns on increased promotional activity across the industry, the company said in a press release.

Selling, general, and administrative expense decreased by 10 basis points as a percentage of sales compared with the prior year, with savings from the cost optimisation programme, offset by inflation.

During the fourth quarter, the company opened 21 new stores, remodelled or relocated 45 stores, and closed 101 stores. As of January 28, 2023, the company operated 2,714 stores in 29 countries in North America, Europe, Asia, Australia, and New Zealand. In addition, 159 franchised stores were operating in the Middle East and Asia.

Looking ahead, for fiscal 2023, the company expects a sales change of down 3.5-5.5 per cent, including approximately 1 per cent from the extra week. Comparable sales change is also expected to be down 3.5 per cent to 5.5 per cent. Licensing revenue is expected to be around $20 million, while gross margin is expected to be between 30.8-31 per cent, and SG&A rate to be 22.6 per cent to 22.8 per cent. Non-GAAP earnings per share (EPS) is expected to be $3.35-$3.65.

Foot Locker has established a series of financial targets for the years 2024 through 2026. Specifically, the company aims to achieve total sales growth of 5-6 per cent and comparable sales growth of 3-4 per cent. Additionally, the company plans to expand its square footage by approximately 5 per cent during this period. To support these growth objectives, the company aims to achieve an adjusted EBIT margin rate of 8.5-9 per cent by 2026. Finally, the company is targeting low- to mid-twenties adjusted EPS growth, indicating its commitment to generating sustained earnings growth over the long-term.

"Our team delivered a great finish to the year with strong fourth quarter results that capitalised on resilient holiday demand and a compelling assortment and inventory position from our brand partners," said Mary Dillon, president and chief executive officer. "We are entering 2023 with a focus on resetting the business—simplifying our operations and investing in our core banners and capabilities to position the company for growth in 2024 and beyond."

Fibre2Fashion News Desk (DP)