Foot Locker Suspends Stock Dividend

Foot Locker Inc. (New York) is suspending its stock dividend. The athletic retailer said that move, disclosed in its second quarter results, is designed “to increase balance sheet flexibility in support of longer-term strategic priorities.”

The company is pausing its quarterly cash dividends beyond its recently approved payout on Oct. 27 to holders of record on Oct. 13. In its most recent quarter, the company paid out $37 million in dividends.

Foot Locker also continued an ongoing downsizing of its store base, closing 108 stores in the second quarter. (The company also opened 15 new stores and remodeled or relocated 16 others during that time.)

“Our second quarter was broadly in line with our expectations, despite the still-tough consumer backdrop,” said President and CEO Mary Dillon. “However, we did see a softening in trends in July and are adjusting our 2023 outlook to allow us to best compete for price-sensitive consumers, while still leaning into the strategic investments that drive our Lace Up plan. Importantly, we are continuing to make progress on our inventory levels and look to best position the business for the upcoming holiday season and into 2024.”

Among the performance results released by the retailer for its second quarter:

* Total sales decreased by 9.9 percent, to $1,861 million, from a year earlier;

* Comparable-store sales decreased by 9.4 percent from a year earlier, driven by ongoing consumer softness, changing vendor mix and the repositioning of Champs Sports;

* The company swung to a $5 million loss, as compared to a net income of $94 million in the corresponding prior-year period.

As of July 29, 2023, the Company operated 2599 stores in 26 countries in North America, Europe, Asia, Australia and New Zealand. In addition, it has 184 franchise stores in the Middle East and Asia.