Foot Locker swung to a net loss amid lower sales last fiscal year, attributed to the repositioning of its Champs Sports brand and weak consumer spending.

The footwear retailer’s net loss stood at US$330 million as revenue fell 6.7 per cent to $8.17 billion in the year ended February 3. Sales slid 6.8 per cent to $8.15 billion while licensing revenue rose 16.7 per cent to $14 million.

“Most of the group’s ongoing decline continues to come from the Champs Sports division where sales were down by 10.4 per cent in total and by the same amount on a comparable basis,” GlobalData MD Neil Saunders said.

“Store closures have not helped here, but neither has the repositioning of the brand which is being pushed into more of a destination for athletes as opposed to a destination for fashion sneakers.”

While Saunders believes that the repositioning helps Foot Locker explore a different part of the market, the strategy is taking time to implement and is negatively impacting the company in the process.

The company ended the year operating 2523 stores in North America, Europe, Asia, Australia, and New Zealand. In addition, 202 licensed stores were operating in the Middle East and Asia.

For this fiscal year, Foot Locker forecasts a sales change of negative 1 per cent to positive 1 per cent and its store count to decline 4 per cent.

“We maintain conviction in the longer-term earnings potential that our Lace Up plan will generate and reiterate the 8.5 per cent to 9 per cent EBIT margin target communicated at our March 2023 Investor Day,” said Foot Locker EVP and CFO Mike Baughn.

“Given our lower starting point exiting 2023, we expect a two-year delay in achieving that goal and now see reaching that target by 2028.”