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Consumers are even giving up on new sneakers

Published

2 years ago

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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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Stocks decline as tariffs and trade tensions escalate

Stocks drop as tariffs worry investors; gold hits record high; Canada resists U.S. annexation talk.

Published

6 days ago

on

May 7, 2025

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Stocks drop as tariffs worry investors; gold hits record high; Canada resists U.S. annexation talk.

In Short:
Stock indexes declined on Tuesday after a nine-day winning streak, while gold prices soared amid economic concerns. Major companies like Ford and Mattel adjusted forecasts due to tariff impacts, and the trade deficit hit a record high of $140.5 billion.

Stock indexes fell on Tuesday, following declines in the Dow and S&P 500 after a nine-day winning streak.

Gold prices reached a new record as markets reacted to ongoing economic concerns.

The downturn persisted following a meeting between Canadian Prime Minister Mark Carney and President Trump, where Carney rejected any notion of Canada being for sale.

Investors showed continued apprehension about the impact of U.S. tariffs and the absence of new trade agreements, particularly as major companies like Ford and Mattel suspended annual guidance due to tariff uncertainties.

Ford impact

Ford, while less affected than competitors, estimated potential tariff impacts could reduce profits by $1.5 billion, prompting a 2.8% increase in its stock.

In contrast, Mattel’s stock rose by 2.6% after it signalled a potential increase in U.S. toy prices, anticipating a $270 million hit from tariffs, while also planning to move manufacturing from China.

Both WK Kellogg and Marriott International adjusted their financial forecasts downward due to tariff-related challenges and broader economic uncertainties.

Clorox shares fell sharply after the company updated its guidance to reflect tariff impacts.

Additionally, President Trump indicated he would announce the details regarding pharmaceutical tariffs within two weeks.

On a related note, new data revealed the trade deficit reached a record $140.5 billion in March, exceeding economists’ expectations and reflecting a surge in imports amid trade policy changes.

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Money

Trump’s tariffs impact S&P 500 and Nasdaq markets

S&P 500 and Nasdaq decline amid Donald Trump’s new tariffs announcement, raising investor concerns ahead of Fed policy meeting.

Published

7 days ago

on

May 6, 2025

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S&P 500 and Nasdaq decline amid Donald Trump’s new tariffs announcement, raising investor concerns ahead of Fed policy meeting.

In Short:
The S&P 500 and Nasdaq fell slightly after President Trump’s 100% tariff on foreign films, with investors worried about market effects ahead of the Federal Reserve’s policy decision. Despite some stocks performing well, overall market volatility and concerns over corporate profitability continue.

The S&P 500 and Nasdaq experienced slight declines on Monday following President Donald Trump’s announcement of a 100% tariff on foreign-produced movies.

Investors are assessing how this new tariff will impact the market ahead of the Federal Reserve’s monetary policy decision later this week.

The major indices have shown volatility since Trump initiated tariffs on April 2, briefly dropping 15% before recovering in the following sessions.

Treasury Secretary Scott Bessent expressed confidence that Trump’s tariff and tax agenda would stimulate long-term investments in the U.S., despite expected short-term market fluctuations.

Markets drop

The Dow Jones Industrial Average increased by 104.18 points, while the S&P 500 decreased by 9.60 points and Nasdaq fell by 39.60 points.

Despite Trump’s announcement, some media stocks showed resilience, while energy stocks suffered losses amid OPEC+ output hikes.

Investors await the Federal Reserve’s upcoming policy announcement, where rates are anticipated to remain unchanged, though future cuts are being priced in for 2025.

Corporate profitability concerns persist due to the new tariffs, evidenced by Tyson Foods’ significant revenue miss, while Skechers reported gains following its plan to go private.

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U.S. economy contracts by 0.3% in first quarter of 2025

U.S. economy shrinks 0.3% in Q1 2025, raising trade policy concerns amid largest export drag since 1947. #USEconomy #GDP2025 #TradeWar #Tariffs

Published

2 weeks ago

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May 1, 2025

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U.S. economy shrinks 0.3% in Q1 2025, raising trade policy concerns amid largest export drag since 1947.


The U.S. economy contracted by 0.3% in the first quarter of 2025, missing forecasts and sparking concerns about the growing impact of trade policy.

The drop marks the largest net export drag recorded since 1947, as businesses scrambled to import goods before Donald Trump’s new tariffs kicked in.

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#USEconomy #GDP2025 #TradeWar #Tariffs #NetExports #Trump #ConsumerSpending #TickerNews #Q1GDP #EconomicUpdate

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