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Consumers are even giving up on new sneakers

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Foot Locker faced a devastating 32% plunge in its stock price as it reported dismal second-quarter earnings, attributing the downturn to what it called “ongoing consumer softness.”

In its latest earnings report released on Wednesday, Foot Locker revealed a staggering 9.9% drop in sales, bringing its quarterly revenue down to $1.8 billion, a notable decline from the $2.1 billion reported during the same period the previous year.

As a direct consequence, Foot Locker’s share price took a nosedive in premarket trading, plummeting by as much as 32.8% to a low of $15.60.

The company, headquartered in New York, had no choice but to revise its yearly forecast downward due to what it described as “the still-tough consumer backdrop.” Now, it anticipates a sales decrease of 8% to 9% for the year, down from the initial prediction of 6.5% to 8%.

Foot Locker’s Chief Executive, Mary Dillon, expressed her concerns, stating, “We did see a softening in trends in July and are adjusting our 2023 outlook to allow us to best compete for price-sensitive consumers.”

Furthermore, Foot Locker’s yearly earnings outlook also witnessed a substantial reduction, with the company now projecting earnings per share between $2 and $2.25. This is a significant drop from the initial forecast of $3.35 to $3.65 per share and falls considerably short of the $3.47 that analysts had expected.

The root cause of this downturn, as Foot Locker reported, is the persistent “consumer softness,” which has led to decreased consumer spending on their products.

Retail struggle

This announcement comes in the wake of similar struggles in the retail industry. Macy’s, another iconic department store, reported declining sales in its second-quarter earnings, which it attributed to diminishing consumer spending and an increase in credit card delinquencies. Macy’s net sales for the period fell from $5.6 billion in the previous year to $5.1 billion.

In-store sales at Macy’s also took a hit, dropping 8%, and digital sales decreased by 10% compared to the same period last year. This disappointing performance caused Macy’s stock to tumble by over 14% to $12.57.

Meanwhile, Target experienced its first quarterly sales drop in six years, with sales down 5.4% from the previous year, including a 10.5% decline in digital sales. Target’s CEO, Brian Cornell, attributed part of the losses to inflation and boycotts of the retailer’s controversial “Pride” collection.

Another retail giant, Dick’s Sporting Goods, reported a 23% drop in profits despite a 3.6% increase in sales, citing “organized retail crime” and inventory shrink as the primary reasons for the disappointing results.

The common thread among these retailers is the challenging environment characterized by consumer reluctance to spend, which is impacting their bottom lines and stock performance. As these companies grapple with these challenges, they are left with the task of finding innovative ways to adapt to the evolving consumer landscape.

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Tesla shareholders approve historic $56B Elon Musk pay package

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Tesla shareholders have voted to approve Elon Musk’s unprecedented $56 billion compensation package, underscoring their confidence in his leadership and vision for the electric car company.

The package, which is tied to ambitious performance targets, includes a mix of stock options and bonuses contingent upon Tesla’s financial and operational milestones over the next decade.

As reported by Reuters, the approval underscores the support that Musk enjoys from Tesla’s retail investor base, many of whom are vocal fans of the mercurial billionaire.

The proposal passed despite opposition from some large institutional investors and proxy firms.

#featured

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Money

Rich listers secret’s: how billionaires build their wealth

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Australian billionaires, including Gina Rinehart, have built their wealth by investing in valuable, income-generating assets.

For the average person looking to build their wealth, one possible option could be to buy quality assets like stocks when the market dips.

Mark Wyld from MW Wealth joins to discuss. #featured #trending #wyld money

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Buyer’s agent unveils key to building wealth through property

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Unveiling the strategies for game-changing wealth building through property.

Wyld Money dives into the world of financial freedom. Whether you’re a seasoned investor or just getting started, join us for actionable tips and tricks to unlock your earning potential, and retire on your own terms.

In this episode, Mark is joined by Buyers Agent, Jack Henderson from Henderson Advocates. #trending #wyld money

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