Foot Locker, Inc. (NYSE:FL) Q3 2022 Earnings Call Transcript

Mary Dillon : Well, Matthew, I’ll start. Thank you for asking because I am super excited about the possibilities ahead. We operate in a category that’s obviously very exciting and dynamic with secular tailwinds around the casualization of society, which is a global trend. I happen to be of the mindset that there’s a lot of folks who don’t even know they can have an entire sneaker wardrobe i.e., me. Anyways, but I just say I really feel like there’s a lot of possibilities in chapters ahead. It’s a category that we have great leadership in, great equity and history. We really authentically street basketball and youth culture, and we’re at the intersection of fitness and trend and sport. And I think yet there’s a lot of folks who probably don’t know Foot Locker, believe it or not, right?

So we’ve got strong brand awareness, but maybe somewhat latent equities. And I think as we think about certainly the momentum we’re already seeing with the diversification of brands, and I think Frank said it well, we’re seeing things with new brands, bringing new customers, women getting more attracted to Foot Locker, and we’re really just getting started. So a combination of what we do in our stores, what we do online, the products that we offer. And then, as I said earlier, how we use tools to really create a demand engine that’s bigger than just the products that we sell, although those are very important, but really attracting new customers to Foot Locker and current customers to come more often and give us a bigger share of their wallet.

I mean there’s a lot of places that you can buy sneakers, but I’m convinced that we’re going to continue to make Foot Locker the destination for all things sneakers.

Andrew Page : Yes. And then speaking to profit and margins, we’re not speaking to the guidance beyond 2022. So we feel very comfortable with where we are. We’re definitely looking forward to getting on the fourth quarter call and providing future outlook, we’re not to be concluded guidance beyond 2022 at this point.

Operator: The next question comes from Corey Tarlowe of Jefferies.

Corey Tarlowe: Good morning, and thanks for taking the question. And congrats on a great quarter. So could you maybe talk a little bit about the promotional environment? It sounds like markdown pressure is expected to get slightly worse — could you generally talk about what you’re seeing presently? Is it slightly worse maybe in apparel versus footwear? Any color there would be appreciated.

Mary Dillon : Yes, sure. I’ll start, and I’ll ask Frank to jump in with some more color. Well, no question that we know across all sectors of consumers right now that there’s a promotional environment. Inflation is high. Fortunately, unemployment is low and wages are rising, we’re seeing this category and our shoppers to be pretty resilient and very resilient and picking us and prioritizing. That said, it’s a promotional time, and I think we’ll expect that to continue through the fourth quarter. And the good news is at Foot Locker, our promotions are working well, and our shoppers are responding. I’d ask Frank, if there’s anything else you’d like to add to the question?