Consumers’ desires for affordable luxury and a fun shopping experience are driving sales of sneakers even in the face of inflation and uncertainty, specialty athletic retailer Foot Locker said Friday (Nov. 18) during its quarterly earnings call.
Catering to these trends, the company achieved better-than-expected results in a volatile macroeconomic environment during the quarter ended Oct. 29 and increased its outlook for the remainder of the year, according to an earnings release.
Total sales were up 3.3% year over year in constant currency terms, and comparable-store sales were up 0.8% from last year’s record results, the company said in the release.
“Sneakers are an affordable luxury — a dynamic that we believe is helping to keep our category resilient in the face of steep inflationary pressures,” Foot Locker President and CEO Mary Dillon said during the call.
Foot Locker shares were up 13% early Friday.
The sneaker category is driven by enthusiasts’ passion for the products, desire for individual expression and love of newness and innovation.
“Sneakers are fun,” Dillon said.
Shoppers in this category value both brick-and-mortar and online experiences, and they want the products to be fun to shop for, she added.
In stores, Foot Locker’s Frontline store associates love sneaker culture, are experts in the category and create energy in the 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 released in conjunction with the call.
Moving ahead, Foot Locker’s greatest focus will be on its omnichannel capabilities, loyalty program, overall digital marketing strategies and the technology platform that enables these features.
“Our current omnichannel customers in the U.S. spend nearly four times the amount of our single-channel shoppers, yet they represent only 6% of our customer base,” Dillon said. “This speaks to a vast opportunity to improve our engagement with customers across our channels and attract more of their spending dollars.”
With its better-than-expected results in the most recent quarter, Foot Locker boosted its outlook for the rest of 2022.
“This is a growth category with a long runway ahead,” Dillon said. “We’re at the intersection of sports, fitness, fashion and the casualization of society, and the tailwinds for sneakers I believe will be persistent for many years to come.”
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