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• Total Revenue: Down 5.8% due to the lapping of the 53rd week in 2023, foreign currency headwinds, and store closures.

• Comparable Sales: Increased by 2.6%, led by Foot Locker and Kids Foot Locker banners at +3.6%.

• Gross Margin: Expanded by 300 basis points to 29.6% year-over-year.

• SG&A Rate: Improved by 10 basis points to 22.3% year-over-year.

• Non-GAAP Earnings Per Share: $0.86, above the revised expectations of $0.70 to $0.80.

• Cash and Debt: Ended the quarter with $401 million in cash and $446 million in total debt.

• Inventory Levels: Up 1.1% year-over-year, with improved inventory turns at approximately 2.8x.

• Free Cash Flow: Generated $105 million in fiscal 2024.

• Store Count: Expected to decrease by approximately 4% in 2025, with square footage down approximately 2%.

• Cost Savings: Achieved $100 million in savings for fiscal 2024, ahead of the $90 million expectation.

• Digital Penetration: Increased by 230 basis points to 21.8% of sales.

• 2025 Guidance: Non-GAAP EPS expected to be $1.35 to $1.65, with comps expected to be between +1% to +2.5%.

• Warning! GuruFocus has detected 7 Warning Signs with FL.

Release Date: March 05, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Foot Locker Inc (NYSE:FL) achieved three consecutive quarters of positive comp sales and year-over-year gross margin expansion.

• The company's 'Lace Up' strategy is driving results, with significant progress made in 2024 and plans to continue this momentum into 2025.

• Foot Locker Inc (NYSE:FL) saw a 2.6% increase in total comp sales in the fourth quarter, led by strong performance in the Foot Locker and Kids Foot Locker banners.

• The company improved its gross margin by 300 basis points year-over-year, driven by merchandise margin recovery and cost savings.

• Foot Locker Inc (NYSE:FL) relaunched its FLX Rewards Program, achieving a 49% sales capture rate in North America, nearing its 50% target two years ahead of schedule.

Negative Points

• Foot Locker Inc (NYSE:FL) experienced a 5.8% decline in total sales, primarily due to the lapping of the 53rd week in 2023 and foreign currency headwinds.

• The company noted consumer uncertainty and cautious spending behavior, impacting business performance in early 2025.

• Foot Locker Inc (NYSE:FL) faced challenges in its apparel business, with comp declines in the mid-teens due to lagging innovation.

• The WSS banner saw a 3.3% decline in comparable sales, attributed to cautious consumer spending and external factors like inflation and fires in Los Angeles.

• Foot Locker Inc (NYSE:FL) anticipates a softer start to 2025, with consumer sensitivity to external factors such as tax refund timing affecting sales.