Foot Locker Inc. reported a slight decline in sales for the fourth quarter and a plan to grow digital sales to one-quarter of the business.
Total sales for the fourth quarter ended Jan. 28 decreased 0.3% to $2.3 billion. Comparable store sales grew 4.2% over the same period, driven by more foot traffic and better access to inventory, the retailer said.
Foot Locker ranks No. 50 in the Top 1000. The database is Digital Commerce 360’s ranking of the largest North American ecommerce retailers.
Foot Locker plans to grow digital sales
Foot Locker CEO Mary Dillon told investors about plans to increase digital sales to 25% of total sales. Online sales made up “in the high teens right around” 17% of sales in the quarter, Dillon said, about $425 million. That’s lower than most competitors, she said, though an increase over the third quarter in 2022, when online purchases made up 16% of sales.
Another shoe seller, Nike (No. 10 in the Top 1000), just reported that digital orders made up 27% of sales in its most recent fiscal quarter. The larger footwear and athletic market has digital penetration nearly double Foot Locker’s, Dillon said, so there’s room to grow.
The retailer plans to hit that 25% online sales goal by 2026, with digital purchases amounting to $2.5 billion.
While Foot Locker’s digital sales lag behind competitors, some statistics show high customer engagement. More than 95% of Foot Locker customers engage with the brand online in some way, from viewing a social media post to reserving an in-demand product, Dillon said. Those digital channels are a “key component” of how customers purchase products from Foot Locker, per Dillon.
Concentrating on omnichannel
Omnichannel sales play a big role in the push to grow digital penetration, Dillon said. Nearly half of customers who make a purchase online involve a store in some way, either through buy online, pick up in store (BOPIS) or shipping from store back rooms.
Omnichannel customers also present a large opportunity for growing overall sales. These shoppers spend more than triple the amount of shoppers who buy through just one channel, Dillon said. However, these shoppers are only about 7% of customers. That’s about half or one-third the levels of omnichannel shoppers at competitors, Dillon said, though a significant increase from just 6% of customers in the third quarter.
Foot Locker hopes to boost those numbers further by refreshing its loyalty program, Chief Commerce Officer Franklin Bracken said. Currently, members spend 80% more per year than non-members. Bracken says the long-term goal is to have at least 70% of omnichannel purchases come from members.
Foot Locker earnings summary
For the fiscal fourth quarter ended Jan. 28, Foot Locker reported:
- Sales decreased 0.3% to $2.33 billion in 2022 from $2.34 billion in the fourth quarter of 2021.
- Net income decreased to $19 million from $102 million in the previous year.
- Foot Locker opened 21 stores, relocated or remodeled 45 stores, and closed 101 stores.
For the fiscal year ended Jan. 28, Foot Locker reported:
- Sales decreased to $8.7 billion from $8.9 billion in 2021.
- Net income was $341 million, down from $892 million in 2021.
Percentage changes may not align exactly with dollar figures due to rounding.
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