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FL

FOOT LOCKER, INC. (FL)·Q2 2026 Earnings Summary

Executive Summary

  • Q2 2026 revenue was $1.857B, down 2.4% y/y, with non-GAAP diluted EPS at -$0.27 and GAAP diluted EPS at -$0.39; comps declined 2.0% overall, but North America comps rose 1.4% as Champs Sports posted its fourth consecutive quarter of positive comps .
  • Results were below Wall Street: non-GAAP EPS of -$0.27 vs consensus $0.10 and revenue of $1.857B vs $1.868B; EPS miss was significant, revenue miss slight (values from S&P Global)*.
  • Gross margin contracted 50 bps y/y; SG&A rate delevered 20 bps y/y, reflecting lower sales and tech investment spend partially offset by cost optimization .
  • Management will not host a Q2 call or provide/ update guidance due to the pending acquisition by DICK’S Sporting Goods; shareholder approval and required regulatory clearances were completed, with closing expected in early September 2025 .

What Went Well and What Went Wrong

What Went Well

  • North America comps +1.4% y/y; excluding WSS, North America comps +2.6%; Kids Foot Locker and Champs Sports continued momentum, with Champs posting its fourth consecutive quarter of positive comps (+2.0%) .
  • Continued progress on store modernization: 52 refreshes and 11 Reimagined stores opened, including the first two Champs Sports Reimagined stores; enhanced FLX Rewards launched in Europe .
  • CEO tone on strategic execution: “We built sequential momentum and delivered positive North American comparable sales… Our team continued to execute our Lace Up Plan… leveraging strong brand partnerships, enhancing our store base… improving our digital platforms, and deepening global engagement through our FLX Rewards Program.” .

What Went Wrong

  • International softness: EMEA revenue declined 15.3% y/y and Asia Pacific declined 14.3% y/y; broader comps for international declined 10.3% .
  • Profitability remained negative: net loss of $38M (vs. $12M prior year) and GAAP diluted loss per share of -$0.39; non-GAAP diluted loss per share of -$0.27 (vs. -$0.05 prior year) .
  • Gross margin -50 bps y/y and SG&A rate +20 bps y/y on deleverage; inventories rose 3.7% y/y to $1,709M due to strategic pull-forward of fall product .

Financial Results

Consolidated results vs prior quarters and y/y changes

MetricQ4 2025Q1 2026Q2 2026
Total Revenue ($USD Billions)$2.248 $1.794 $1.857
GAAP Diluted EPS ($)$0.51 -$3.81 -$0.39
Non-GAAP Diluted EPS ($)$0.86 -$0.07 -$0.27
Comparable Sales (%)+2.6% -2.6% -2.0%
Revenue YoY Change (%)-5.8% -4.6% -2.4%
Gross Margin YoY Change (bps)+300 -40 -50
SG&A Rate YoY Change (bps)-10 +100 +20
Net (Loss) Income ($USD Millions)$49 -$363 -$38

Segment breakdown — Q2 2026 sales by banner and region

Banner/RegionSales ($USD Millions)YoY % (constant currency)Comparable Sales
Foot Locker$764 +1.3% +1.8%
Champs Sports$269 +0.7% +2.0%
Kids Foot Locker$165 +7.1% +7.6%
WSS$147 -5.2% -8.1%
North America Total$1,346 +1.1% +1.4%
EMEA$401 -15.3% -11.4%
Asia Pacific$104 -14.3% -6.4%
Total$1,851 -3.7% -2.0%

KPIs across quarters

KPIQ4 2025Q1 2026Q2 2026
Cash & Equivalents ($USD Millions)$401 $343 $299
Total Debt ($USD Millions)$446 $445 $444
Merchandise Inventories ($USD Millions)$1,525 $1,665 $1,709
Weighted-Average Diluted Shares (Millions)95.6 95.3 95.6
Stores Operated (Count)2,410 2,363 2,354

Guidance Changes

MetricPeriodPrevious Guidance (Q4 2025 release)Current Guidance (Q2 2026)Change
Sales ChangeFY 2025-1.0% to +0.5% No guidance provided due to pending transaction Suspended
Comparable SalesFY 2025+1.0% to +2.5% No guidance provided Suspended
Gross MarginFY 202529.3% to 29.7% No guidance provided Suspended
SG&A RateFY 202524.3% to 24.5% No guidance provided Suspended
D&AFY 2025$200–$210M No guidance provided Suspended
EBIT MarginFY 20252.6%–3.1% No guidance provided Suspended
Net InterestFY 2025~$12M No guidance provided Suspended
Non-GAAP Tax RateFY 202532.5%–33.0% No guidance provided Suspended
Non-GAAP EPSFY 2025$1.35–$1.65 No guidance provided Suspended
Capital ExpendituresFY 2025$270M (Adj. Capex $300M) No guidance provided Suspended
Store Count ChangeFY 2025Down ~4% No guidance provided Suspended
Square Footage ChangeFY 2025Down ~2% No guidance provided Suspended
Licensing & Other RevenueFY 2025~$24M No guidance provided Suspended

Earnings Call Themes & Trends

Note: No Q1 or Q2 calls were held due to the pending DICK’S transaction; Q4 themes shown below for trajectory .

TopicPrevious Mentions (Q4 2025)Previous Mentions (Q1 2026)Current Period (Q2 2026)Trend
Digital & mobile appsNew Foot Locker US app launched; digital comps +12.4%; targeting ~25% e-comm penetration by 2026 Launched new Champs Sports and Kids Foot Locker mobile apps “Improving our digital platforms” noted in Q2 release Continued investment; cadence moderated on non-customer tech
Loyalty (FLX)FLX penetration reached 49% of North America sales in Q4; plan to expand to Europe in 2025 FLX program mid-2024 relaunch; continued adoption Enhanced FLX Rewards launched in Europe Positive adoption and geographic expansion
Nike/product pipelinePartnership “reset”; allocation growth in Q4; focus on big 3 franchises & innovation (Shox, Max Air) —Positive NA comps led by Foot Locker/Kids/Champs; macro still promotional Mix diversification; Nike recovery paced later in year
Inventory & supply chainPulled forward spring receipts; improved turns to ~2.8x; FCF generated Inventories +0.4% y/y; deferred tax asset valuation allowance Inventories +3.7% y/y on strategic pull-forward of fall product Controlled, with strategic pull-forward timing
Tariffs/macroConsumer uncertainty; promotional DTC environment; cadence of innovation supportive in H2 Macro softness globally; tech spend pacing Soft traffic, especially WSS/international Macro caution persists
International strategyEurope choppy; plan to refresh stores; exit certain markets; convert some to licensed model Closed stores in South Korea/Scandinavia; sold Greece/Romania to license partner EMEA/APAC revenue declines; ongoing store actions Streamlining footprint; licensing model expansion

Management Commentary

  • “We built sequential momentum and delivered positive North American comparable sales results… including a positive start to the Back-to-School season in July… our results reflect a challenging operating environment and soft store traffic trends, particularly in our WSS and international businesses.” — Mary Dillon, CEO .
  • On transaction status: “We are pleased to have recently received shareholder approval for the Company’s acquisition by DICK’S Sporting Goods… we look forward to the successful completion of the transaction.” — Mary Dillon, CEO .
  • Q4 strategic framing: “We delivered fourth quarter results above our previously revised expectations… return to positive comparable sales growth, gross margin expansion, and positive free cash flow in fiscal 2024 serve as proof points that our Lace Up Plan is working.” — Mary Dillon .
  • Cost and investment pacing: “We achieved $100 million in savings as part of our $350 million cost savings plan… we’ll be slowing the investment cadence of some of our technology investments to ensure appropriate pacing… while maintaining customer-facing investments.” — Mary Dillon .

Q&A Highlights

  • Consumer cadence and macro: “We started to see some consumer uncertainty… customers respond to compelling activations… cautious in between.” — Mary Dillon; guidance embeds lower-end comp if uncertainty persists — Mike Baughn .
  • Nike partnership & innovation: Partnership “reset,” allocation growth returned; supportive of actions on big 3 franchises; bullish on Shox, running constructs, and Max Air pipeline — Frank Bracken/Mary Dillon .
  • Tariffs exposure: Direct exposure “moderate to small,” ~low single-digit % of sales; some fixtures exposure in China/Mexico/Canada; monitoring potential impacts — Michael Baughn .
  • SG&A leverage: Structural progress but acknowledged 24% SG&A not supportive long-term; modest leverage excluding incentive comp normalization — Michael Baughn .
  • WSS banner: Value focus (<$100 footwear), local engagement; cautious consumer in California and wildfire impacts; one new store in 2025, prioritize profitability of existing fleet — Frank Bracken .

Estimates Context

MetricConsensusActual
Revenue ($USD Billions)$1.868*$1.857
Non-GAAP Diluted EPS ($)$0.10*-$0.27
# of EPS Estimates12*—
# of Revenue Estimates12*—

Values retrieved from S&P Global.*

  • EPS was a significant miss versus Street ($-0.27 vs $0.10*), while revenue was a slight miss ($1.857B vs $1.868B*) .
  • Estimate revisions likely move lower on international softness and gross margin compression, partially offset by North America comp resilience and ongoing cost optimization .

Key Takeaways for Investors

  • Q2 print was weak versus consensus on EPS and slightly soft on revenue; international headwinds (EMEA/APAC) and WSS banner pressure offset modest North America comps strength .
  • No Q2 call or updated guidance due to the DICK’S transaction; near-term stock narrative likely tethered to deal closing and integration optics rather than standalone fundamentals .
  • Watch inventory pacing and margin trajectory into H2: strategic inventory pull-forward and promotions compressed gross margin (-50 bps), but cost actions continue and NA comps show resilience .
  • Store modernization is an identifiable ROI lever (refresh/Reimagined) and FLX Rewards expansion to Europe enhances engagement; these support medium-term comp recovery once macro normalizes .
  • Brand mix diversification beyond Nike remains important; Q4 commentary highlighted double-digit growth across non-Nike brands, which can buffer category volatility .
  • International restructuring/licensing and selective store closures are de-risking the footprint; monitor EMEA refresh program impact and Asia Pacific stabilization .
  • For traders: near-term catalysts are deal close and any regulatory or legal updates; for longer-term holders, margin recapture, SG&A leverage, and digital/loyalty penetration are the core value drivers post-transaction .