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Foot Locker (FL) -11.95% after warning about Q4 supply chain issues
Foot Locker (FL) ended the final session of the week nearly 12% lower despite a “strong” Q3 report after warning that supply chain issues will persist in Q4.
Foot Locker (FL) closed 11.95% down in New York on Friday despite its Q3 beats after the sportswear and footwear retailer said that supply chain problems will be prevalent into the new year.
Foot Locker eased past the Wall Street consensus for the three months to 30th October as earnings per share jumped 59.5% year-over-year to $1.93 and group revenues climbed 3.75% to $2.189bn.
Analysts were expecting the New York-based company to deliver $1.21 earnings and $2.14bn revenue.
While supply chain issues have been a persistent headwind in recent months, Foot Locker believes that it is in a good position to meet consumer demand in the busy period up to Christmas.
It has been helped by a 9.1% increase in merchandise inventories, though that might not be enough for Q4 as a whole as Foot Locker said that disruptions will persist.
That admission shaped investor sentiment on Friday as Foot Locker shares slumped into the red early on and eventually closed 11.95% lower at $50.68.
CEO Richard Johnson was happy with the “strong performance” in Q3 though, which compared favourably with a “robust” back-to-school period in 2020.
He added: “We successfully completed the acquisition of WSS in the third quarter, and subsequently closed the atmos transaction as well, welcoming both of these great teams to the Foot Locker, Inc. family.”
Foot Locker was not the only company declining on Friday, as aviation giant Boeing (BA) also dipped 5.6% after a report in the Wall Street Journal claimed that its 787 Dreamliners were being produced at a much slower rate due to concerns about defects.
Ross Stores (ROST) also slumped 6.2% after it echoed Foot Locker’s warning about ongoing supply chain issues over the holiday season.
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