Foot Locker, Inc. (NYSE: FL) is a global retailer specializing in athletic footwear and apparel, operating stores in 26 countries. Following its fourth-quarter results for fiscal 2024, the company reported a total sales decline of 5.8% year over year, driven mainly by the absence of the 53rd week that contributed $98 million in sales for the previous fiscal year. In a noteworthy development, Foot Locker achieved positive comparable sales growth of 2.6%, marking its third consecutive quarter of such growth, primarily from its global Foot Locker and Kids Foot Locker banners, which increased by 3.6%.

The gross margin improved significantly by 300 basis points year-over-year, bringing it to 29.6%. This rise was attributed to a sequential improvement in merchandise margin as well as a reduction in markdown levels despite a competitive promotional environment. Selling, general, and administrative expenses (SG&A) as a percentage of sales decreased by 10 basis points to 22.3%, attributed to effective cost management and a lower incentive compensation structure.

In terms of earnings, Foot Locker’s GAAP earnings per share (EPS) from continuing operations reached $0.57, a significant recovery from a loss of $4.13 per share in the prior year. The non-GAAP EPS was reported at $0.86, compared to $0.38 the previous year. The balance sheet showed cash and cash equivalents of $401 million and total debt of $446 million as of February 1, 2025. Merchandise inventories were up 1.1% compared to last year, despite expectations of flat levels.

Foot Locker’s 2025 outlook includes an anticipated total sales range of a decline of 1% to an increase of 0.5%, with comparable sales projected to grow between 1% and 2.5%. The company anticipates a square footage reduction of 2% and a total store count decrease of approximately 4%. Gross margin is expected to expand from 29.3% to 29.7%, while the SG&A rate is projected to be between 24.3% and 24.5%. The company has set a non-GAAP EPS guidance of $1.35 to $1.65 for the full year.

In capital expenditures, Foot Locker plans to spend approximately $270 million, focusing on customer-facing investments amid its ongoing cost optimization efforts. Strong emphasis will continue on store refreshes, with 300 expected in 2025 following over 400 in the previous year. The adjustments to capital investments reflect a conscious strategy to prioritize high-return projects while being mindful of consumer spending behavior. Overall, Foot Locker has reported significant operational improvements and strategic adjustments that aim to foster growth in 2025 while addressing ongoing market challenges.