Foot Locker touts renewed Nike relationship, posts earnings

Foot Locker CEO Mary Dillon on Monday touted a “renewed” and revitalized relationship with Nike, including an emphasis on what she called “sneaker culture.”

Shares of Foot Locker rose about 4%. The sneaker and athletic-apparel retailer also reported quarterly earnings Monday morning. 

During the holiday quarter, which ended Jan. 28, Foot Locker posted just under $2.34 billion in sales, slightly lower than a year earlier. Its profit for the period came in at $19 million, or 20 cents a share, compared with $103 million, or $1.02 a share, a year earlier. Excluding items, earnings per share were 97 cents, down from $1.46.

For the current fiscal year, which will include an extra week, Foot Locker expects sales and comparable sales to be down 3.5% to 5.5%, with adjusted earnings per share of $3.35 to $3.65.

Since Dillon took over as chief executive of Foot Locker in September, she’s spent a “great deal of time with Nike revitalizing our partnership” after Nike moved away from wholesale channels to focus on building out direct to consumer sales. 

“Of course, Nike is our largest brand partner and the leader in the industry. From day one I’ve been welcomed to the industry by John and Heidi and their team,” Dillon said of Nike CEO John Donahoe and Heidi O’Neill, its president of consumer and marketplace.

Dillon, the former chief executive of Ulta, said Foot Locker and Nike have “re-established joint planning, as well as data and insight sharing.” 

“The fruits of our renewed commitment to one another will begin to show up in holiday this year as we build increasing momentum to 2024 and the 50th anniversary of Foot Locker,” Dillon said. 

For the past several years, Nike has been working to grow its direct to consumer business and with it, cut partnerships with numerous wholesale accounts so it could grow its e-commerce channels and open new stores. 

However, like other retailers, Nike was stuck with a glut of inventory brought on by pandemic-related supply chain challenges over the last few quarters and relied on those wholesale partners to move that product out. 

During its fiscal-second quarter that ended Nov. 30, wholesale revenue was up 19% for the quarter after it’d been effectively flat over the previous several quarters. 

In January, when asked about Nike’s direct to consumer plans during an interview with CNBC, Donahoe spoke about the importance of an omnichannel model.

“Our strategic wholesale partners, partners like Dick’s Sporting Goods or Foot Locker or JD are very, very important because consumers want to be able to try on products, they want to be able to touch and feel,” Donahoe said. “And so we’ve invested in strengthening those strategic relationships.”