NEW YORK, United States — Foot Locker Inc. suffered their worst stock decline since the depths of the last recession after a disappointing forecast renewed concerns that the sporting-goods industry’s growth streak has come to an end.
The footwear chain reported weaker-than-expected results by most every benchmark — profit, sales and margins — and forecast continued sales declines over the rest of 2017.
The results follow disappointing numbers from others in the sporting-goods industry, including Under Armour Inc., Hibbett Sports Inc. and Cabela’s Inc. That’s a sign that the broader field may be headed for “several years of pain,” Quo Vadis Capital analyst John Zolidis said in a research note.
“The consumer has moved on to other things,” he said.
Shares of Foot Locker fell as much as 25 percent to $35.75, the biggest intraday drop since November 2008. Even before the tumble, the stock had already lost a third of its value this year.
Foot Locker is struggling to adapt to a shift in consumer preference that includes a penchant for online shopping over visiting stores. Many consumers also are spending on experiences — such as trips and eating out — over physical goods. The change has dented the value of retailers across the spectrum, with sporting-goods vendors getting hit especially hard. Nike Inc., Adidas AG and Amer Sports Oyj also declined after Foot Locker and Hibbett reported disappointing results.
In delivering the earnings, Foot Locker chief executive officer Dick Johnson said “some recent top styles fell well short of expectations and impacted this quarter’s results.” That include Nike’s Jordan brand and Adidas’s Stan Smith. He also cited a lack of “innovative new products.”
“We are obviously disappointed in the results for the quarter,” Johnson said. “Our team is working quickly to adjust our operations to a changed retail landscape in which we are seeing our consumers move faster than ever from one source of inspiration or influence to another.”
Foot Locker reported adjusted earnings of 62 cents a share, far worse than Wall Street’s average forecast of 90 cents. Comparable-store sales declined 6 percent, well below the expectation of 1.7 percent expansion according to Consensus Metrix. Sales also fell short of forecasts.
By Jonathan Roeder and Janet Freund; editor: Nick Turner.