Foot Locker: Consumers want affordable luxury and fun
Consumers’ desires for affordable luxury and a fun shopping experience are driving sneaker sales, even in the face of inflation and uncertainty, sports retailer says Foot locker said Friday (November 18) during its quarterly earnings call.
Responding to these trends, the company performed better than expected in a volatile macro environment in the quarter ended Oct. 29 and raised its outlook for the rest of the year, according to a earnings Release.
Total sales were up 3.3% year-over-year in constant currency terms, and same-store sales were up 0.8% from last year’s record results, it said. the company in the press release.
“Sneakers are an affordable luxury – a dynamic that we believe helps maintain our category’s resilience in the face of strong inflationary pressures,” said Foot Locker Chairman and CEO. Mary Dillon said during the call.
Foot locker actions were up 13% early Friday.
The sneaker category is driven by enthusiasts’ passion for products, a desire for individual expression, and a love of novelty and innovation.
“Sneakers are fun,” Dillon said.
Shoppers in this category value both physical and online experiences, and they want products to be fun to buy, she added.
In stores, Foot Locker’s Frontline store associates love sneaker culture, are experts in the category and create energy in stores, she said.
Online, the company’s Instagram following is five times larger than the combined total of its top four competitors, according to a presentation published at the same time as the call.
Going forward, Foot Locker will primarily focus on its omnichannel capabilities, loyalty program, overall digital marketing strategies, and the technology platform that enables these features.
“Our current omnichannel customers in the US spend nearly four times the amount of our single-channel shoppers, yet they only represent 6% of our customer base,” Dillon said. “This represents a vast opportunity to improve our engagement with customers across all of our channels and attract more of their spend.”
With its better than expected results in the last quarter, Foot Locker has improved its outlook for the remainder of 2022.
“This is a growth category with a long track ahead of us,” Dillon said. “We’re at the intersection of sport, fitness, fashion and societal insecurity, and I think the tailwinds for sneakers will persist for many years to come.”
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