Wrapping up Q4 earnings, we look at the numbers and key takeaways for the footwear retailer stocks, including Foot Locker (NYSE: FL) and its peers.
Footwear sales–like their apparel counterparts–are driven by seasons, trends, and innovation more so than absolute need and similarly face the bigger-picture secular trend of e-commerce penetration. Footwear plays a part in societal belonging, personal expression, and occasion, and retailers selling shoes recognize this. Therefore, they aim to balance selection, competitive prices, and the latest trends to attract consumers. Unlike their apparel counterparts, footwear retailers most sell popular third-party brands (as opposed to their own exclusive brands), which could mean less exclusivity of product but more nimbleness to pivot to what’s hot.
The 4 footwear retailer stocks we track reported a slower Q4. As a group, revenues missed analysts’ consensus estimates by 1.7% while next quarter’s revenue guidance was 0.5% below.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 24.4% since the latest earnings results.
Best Q4: Foot Locker (NYSE: FL)
Known for store associates whose uniforms resemble those of referees, Foot Locker (NYSE: FL) is a specialty retailer that sells athletic footwear, clothing, and accessories.
Foot Locker reported revenues of $2.25 billion, down 5.7% year on year. This print fell short of analysts’ expectations by 3.2%. Overall, it was a mixed quarter for the company with a solid beat of analysts’ EBITDA estimates but full-year EPS guidance missing analysts’ expectations.
Mary Dillon, President and Chief Executive Officer, said, "We delivered fourth quarter results above our previously revised expectations, as our investments and execution drove positive comparable sales and meaningful gross margin improvement compared to the prior year. Reflecting on 2024 overall, we made significant progress in elevating our in-store experience with our new Reimagined doors and store refresh program, enhancing our digital and mobile capabilities, expanding engagement with our FLX Rewards Program, and leaning into brand building through compelling campaigns and partnerships. Our return to positive comparable sales growth, gross margin expansion, and positive free cash flow in fiscal 2024 serve as proof points that our Lace Up Plan is working."
Foot Locker delivered the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is down 28.2% since reporting and currently trades at $12.48.
Read our full report on Foot Locker here, it’s free.
Boot Barn (NYSE: BOOT)
With a strong store presence in Texas, California, Florida, and Oklahoma, Boot Barn (NYSE: BOOT) is a western-inspired apparel and footwear retailer.
Boot Barn reported revenues of $608.2 million, up 16.9% year on year, in line with analysts’ expectations. The business performed better than its peers, but it was unfortunately a mixed quarter with a decent beat of analysts’ EBITDA estimates but EPS guidance for next quarter missing analysts’ expectations.
Boot Barn delivered the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 32.7% since reporting. It currently trades at $117.64.
Is now the time to buy Boot Barn? Access our full analysis of the earnings results here, it’s free.
Designer Brands (NYSE: DBI)
Founded in 1969 as a shoe importer and distributor, Designer Brands (NYSE: DBI) is an American discount retailer focused on footwear and accessories.
Designer Brands reported revenues of $713.6 million, down 5.4% year on year, falling short of analysts’ expectations by 0.8%. It was a disappointing quarter as it posted full-year EPS guidance missing analysts’ expectations and a miss of analysts’ EBITDA estimates.
As expected, the stock is down 13% since the results and currently trades at $3.30.
Read our full analysis of Designer Brands’s results here.
Shoe Carnival (NASDAQ: SCVL)
Known for its playful atmosphere that features carnival elements, Shoe Carnival (NASDAQ: SCVL) is a retailer that sells footwear from mainstream brands for the entire family.
Shoe Carnival reported revenues of $262.9 million, down 6.1% year on year. This result lagged analysts' expectations by 2.7%. It was a softer quarter as it also logged full-year EPS guidance missing analysts’ expectations.
Shoe Carnival had the slowest revenue growth and weakest full-year guidance update among its peers. The stock is down 23.6% since reporting and currently trades at $17.30.
Read our full, actionable report on Shoe Carnival here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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